THE BLOG

Where's the Money? The Elephant in the Boardroom

06/25/2013 10:29 pm ET | Updated Aug 25, 2013

This week, the governing Board of the Green Climate Fund (GCF) is meeting for the fourth time in Songdo, South Korea. Though the Board has met three times previously, and the Transitional Committee that designed the Fund's governing instrument met four times in 2011, there are still a huge number of questions about the GCF that remain to be answered - questions as basic as "what are the objectives, principles and vision for the Green Climate Fund?"

Civil society organizations hope that the GCF will avoid the flaws of existing funds such as the World Bank's Climate Investment Funds. These and other funds have been rightly criticized for lack of accountability to affected communities, the use of debt-producing loans rather than debt-free grants, and for failing to reach the poorest of the poor.

Along these lines, the GCF has a great deal of promise in that its governing instrument explicitly acknowledges the importance of country ownership, multi-stakeholder engagement, direct access to funding, gender sensitivity, and so on. The GCF's objective is to promote transformative, climate-friendly change in developing countries, in the context of sustainable development. This is all great stuff - but turning these principles into concrete plans of action is a long process fraught with potential pitfalls and political battles.

This is where the GCF Board finds itself. At this week's meeting, the Board will discuss its "business model framework," including the role of the Fund's private sector facility, what principles of country ownership and direct access look like in practice, what financial instruments the Fund will use, and so on. These design aspects of the GCF are crucial, and the Board must get them right in order to ensure that the GCF benefits the world's most vulnerable in a sustainable and inclusive manner. But a larger question looms over the whole affair.

Where is the money?

Developed countries have failed to provide concrete commitments to scaled-up, predictable, new and additional public climate finance. While they have pledged to mobilize $100 billion in climate finance annually starting by 2020, there is as yet no indication of how they plan to reach this goal. Perhaps more importantly, there are no concrete, collective commitments to provide climate finance in the pre-2020 period - and as we all know, the effects of climate change are not waiting for 2020 to make themselves felt.

The United States is particularly worthy of condemnation in this regard, refusing to give any numerical targets or timelines for providing climate finance. If the U.S. can find $20 billion to help New York City build resilience to climate change, and if Congress can seriously consider $38 billion in unnecessary "border security" measures, surely the U.S. can provide its fair share of $100 billion in international climate finance.

Yet the U.S. claims to have no money available to meet its obligation to help developing countries prepare for an imminent climate crisis that is largely the making of the industrialized world. President Obama's just-announced Climate Action Plan, while it has some laudable elements, says essentially nothing on climate finance: just that the U.S. will "seek to build" on its efforts to date.

This refusal to make real commitments to climate finance is despite the existence of many options for raising public revenue, including financial transaction taxes, closing corporate tax loopholes, or putting levies on unregulated emissions from the international aviation and shipping sectors. Yet even without any of these new sources of revenue, there's plenty of money for bank bailouts, drone strikes, walling off the borders, and - yes - subsidizing companies that specialize in making the climate crisis even worse by digging up and burning more and more fossil fuels. What's wrong with this picture?

Determining the correct structure and operational principles of the Green Climate Fund is absolutely essential. But even the best-designed fund is useless without money. It's time for the U.S. to take its responsibility to address the climate crisis seriously. In the world of climate finance, that means playing a constructive role at the GCF - and it also means footing its fair share of the bill.