Countdown to Cape Town - Report on the 2nd meeting of
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Countdown to Cape Town
Report on the 2nd meeting of the
Transitional Committee to design the Green Climate Fund
By Sven Harmeling1, with support from Linde Grießhaber
On 13 and 14 July, the Transitional Committee tasked to design the Green Climate Fund met in Tokyo
for its 2nd meeting. It was preceded by a technical workshop which served to compile and exchange
experience of existing multilateral funds. With a view to delivering the results required to
operationalise the Green Climate Fund by COP17, the Transitional Committee intensified its
exchange on key challenges for the design of the Fund and agreed on timeline, deliverables and
responsibitilies for the way forward until its final meeting to be held in October in Cape Town, South
Africa.
This paper, following up on a report on the 1st meeting of the TC, summarises some of the key issues
addressed in Tokyo.2 An official report or at least a chair´s summary prepared by the Technical
Support Unit to the Transitional Committee is expected to be published in the next weeks on the TC
website, where also all the relevant background material to the meeting and the workshop, including
submissions and presentations, can be found.3
1. Introduction
The second meeting of the Transitional Committee took place in Tokyo, on the invitation of the
Japanese government, two and a half months after the first TC meeting, and approximately three
months before the final meeting which is supposed to take place in Cape Town in the second half of
October. In between, the TC held its first technical workshop and a civil society consultation meeting
at the end of May in Koenigswinter, Germany.
Since the first meeting, the Technical Support Unit, based primarily at the UNFCCC Secretariat in
Bonn, was expanded and the working relationship between the TSU and the co-facilitators of the four
workstreams which were elected at the first meeting had to develop. From an observer point of view,
the most significant improvement in the operations of the TC before the Tokyo meeting was that all
meeting documents were made available to the public on the UNFCCC website on the Transitional
Committee.
2. General aspects and procedural matters
The overall focus of the meeting was to consider and discuss the background documents and scoping
papers prepared for the four workstreams. The scoping papers tried to map out some areas of
convergence as well as issues which require more clarification. The intention of the meeting was not
1
Contact: harmeling@germanwatch.org
2
This paper is based on an extensive transcript of the meeting´s webcast. It does not seek for entire comprehensiveness, the
authors have chosen to report on issues which they have identified as most relevant. Where statements from specific TC
members are referred to, this has been done with the intention of objectively reporting on the meeting. Any such references in
this paper should not be used as quotation of the TC members´ statements. Should misinterpretations or inaccuracies have
occurred, the authors apologise and affirm that this has not been done on purpose.
3
http://unfccc.int/cooperation_and_support/financial_mechanism/green_climate_fund/items/5869.phpCountdown to Cape Town: Germanwatch report on the 2nd meeting of the Transitional Committee
to do this in line-by-line negotiations since this would have been to early, but to reflect the views of
the TC members on the content of the papers and to identify issues which have yet been
underrepresented in the papers. Several TC members and observers had prepared submissions on the
different workstreams in advance.
After a welcome address by the Mexican co-chair of the TC and a representative from the Japanese
government, the TC meeting basically started with a brief report back of the co-facilitator of
workstream III, Farrukh Khan (Pakistan), on the technical workshop that preceded the TC meeting
and which had not been webcasted. It served primarily as an exchange of views on the experience of
existing funds and thereby intended to provide an important starting point for more in-depth
discussions of how to design the Green Climate Fund (GCF) most effectively based on this
experience. Key points highlighted in the summary were the importance of the business model, the
governance and the access modalities of the GCF.
This opening was followed by a number of interventions from different observer constituencies. The
fact that they were given the opportunity to early on present their views on key issues to address by the
TC can be seen as an important signal for openness and transparency. Among the aspects highlighted
were the appreciation of the increased transparency of the TC process, the necessity to work towards
the operationalisation of the GCF in Durban, and the need to make the GCF having a transformational
impact, inter alia through
- promoting country ownership and direct access and funding for larger-scale programmes and
national strategies,
- providing for significant, meaningful stakeholder input and participation on the GCF level as
well as within developing countries,
- stepping up institutional capacity at the country and regional level,
- ensuring that climate action does not come at the expense of other environmental and
sustainable development objectives, and
- ensuring the use of integrated criteria based on human rights, gender equity, and sustainability
principles.
On procedural matters, the most important aspect of the first part of the TC meeting was that new
vice-chairs were elected, from Singapur and Australia, in addition to the three co-chairs. This followed
a request by the representatives from Asian countries during the first TC meeting, in order to ensure
that this significant region is adequately presented in the governance structure of the TC. Fortunately,
this decision was adopted without greater debates.
Another matter of discussion was the potential conflict of interest of staff seconded to the TSU in
particular with regard to the role of World Bank staff involved, since at the same time the World Bank
will be performing the role of the interim Trustee. As in the first TC meeting, the TC member from
Nicaragua raised this concern and proposed to use conflict of interest rules and principles at least as
stringent as standard UN language (supported by Philippines). The interventions from some TC
members (USA, Japan) reflected that the way this issue is currently handled by the TSU Secretary is
sufficient in their views, and therefore there was no consensus on taking additional action.
Nevertheless, Nicaragua pointed to the fiduciary duty of the TC and requested to have the concern
addressed in the meeting report.
Further issues touched open but not decided were, inter alia, the active observer status and the
definition of consensus.4 Noteworthy are also the additional financial pledges for the work of the TC
made by Germany and Denmark.
3. Workstream I: Scope, Guiding Principles, and Cross-
cutting Issues
The Technical Support Unit under the guidance of the co-facilitators had prepared the discussion on
work-stream I through a background note which compares existing relevant funds and institutions with
regard to a number of parameters, such as overarching goals, objectives and principles, funding
mechanism, annual turnover, sources of financial resources and the allocation of funds between
4
See also Germanwatch report on the 1st meeting of the TC: http://www.germanwatch.org/kliko/ks48e.pdf
2Countdown to Cape Town: Germanwatch report on the 2nd meeting of the Transitional Committee
different areas under climate change, such as mitigation, adaptation etc.5 Furthermore, a working paper
was prepared which tries to collate key aspects on scope, guiding principles and cross-cutting issues
raised so far in the TC process, based on submissions by TC members and observers, views expressed
at the first technical workshop and a mapping of linkages with other workstreams.6 Most important, it
tried to map out areas of convergence as well as clusters of views where convergence is not yet
apparent.
Presentation by the co-facilitators
The session started with an overview presentation of the Co-facilitator from Spain, which highlighted
some areas of convergence as well as issues which need further clarification.7 In particular the
following are noteworthy:
- agreement is needed on the business model of the Fund, whether it is supposed to become a
primary mechanism for climate finance potentially absorbing other mechanisms, whether it
would be designed to fill existing gaps, or whether a middle-ground option is the way to go;
- on objectives and scope: while the promotion of low-emission and climate-resilient
development as a contribution to the ultimate objective of the Convention is seen as an area of
convergence, there is less clarity about further specification (such as reference to 2°C,
transformational character, catalytic role enhanced implementation of the Convention etc.) and
the operationalisation of these;
- regarding principles guiding the GCF, it remains subject to discussion how specifically the
broad principles of the Convention and further provisions (which may be much more concrete,
e.g. those in the Cancún Agreements) would be applied, and whether they should be
accompanied by those stemming e.g. from the Paris Declaration on Aid Effectiveness and
what the associated implications would be8;
- other principle-related issues include the question whether only incremental/additional or full
costs should be covered; which forms of finance (grants, loans etc.) for which purposes to be
used; what conditions would be applied for direct access, results-based approaches; role of
windows and which windows to start with, etc.
Discussions among TC members
The following discussions among TC members showed that the presentation given by the Spanish co-
facilitator described the state of the debate and the issues under consideration quite adequately, since
on many of the issues different views were expressed, which only to a certain extent revealed
divergence, while mostly revealing the need for clarification.
For example, when the role, scope and limits of windows are not clear it is difficult to decide on a
higher-level which windows should be applied from the beginning. Result-based approaches do not
seem to be questioned on a principle level (several TC members addressed this positively, e.g. China,
Denmark, Philippines, Poland, Pakistan, Samoa), but there is the concern that they could entail certain
conditions which could be interpreted as “political conditionalities”, or which would pose significant
barriers for receiving funding. However, they could also be seen as rewarding good outcomes. Similar
clarification is required for the term “catalytic” which is often used but rarely defined. However,
clarification of these and other issues rather belongs to the other workstreams (therefore not all debates
are addressed in detail in this section), which might make the search for a concise description of the
scope, purpose and principles of the GCF easier.
On the business model, a realistic approach seems to be more a middle-ground option, since it is
difficult to see that the TC would propose that other funds should be absorbed into the GCF at this
stage, but it can of course be designed in a way that it remains possible at a later stage. However, it is
5
http://unfccc.int/files/cancun_agreements/green_climate_fund/application/pdf/tc2_w1_2_290611.pdf
6
http://unfccc.int/files/cancun_agreements/green_climate_fund/application/pdf/tc2_ws1_1_290611.pdf
7
The slides are available for download at: http://unfccc4.meta-fusion.com/kongresse/tc02/pdf/WSI-13-July-version-1-
Final.pdf
8
It has to be noted here that the application of the Paris Declaration Principles and subsequent agreements to the UNFCCC
and associated processes is sometimes questioned by some developing countries, partially based on the argument that climate
finance (in particular for adaptation) is rather of a compensatory nature than being aid, and also that not all UNFCCC Parties
are part of the aid effectiveness process. However, in some cases the principles are quite in line, e.g. “Party driven”
(UNFCCC) and “ownership” (Paris Declaration). Thus, a general abstract debate whether to apply the principles from the one
or the other process does not seem to be the most effective way forward, but agreeing on the substance.
3Countdown to Cape Town: Germanwatch report on the 2nd meeting of the Transitional Committee
no secret that many developing countries would like to see the GCF become the channel where most
of the climate finance would go through (Ethiopia). While there seems to be no disagreement that
leveraging private sector finance through the means of the GCF where appropriate may be one of the
means to scale-up climate-friendly investment, the weight that this feature should be given is quite
disputed.
On objectives and scope, a number of TC members highlighted the importance of more specific
higher-level objectives such as contribution to the 2°C objective agreed in Cancún (Germany) or
transformational change (Germany, Ethiopia), which are mentioned in the scoping paper, but where
clarification regarding their potential operationalisation is absolutely required. There was also the
suggestion of having a workshop focusing on the meaning and operationalisation of
“transformational”.
With regard to principles guiding the GCF, there needs to be clarification in how far Convention
principles apply, where a number of countries referred to different principles in the Convention (such
as Art. 11, common but differentiated responsibilities) (e.g. Brazil, China, India, Pakistan), while the
USA expressed its view that there is no consensus on the wholesale application of Convention
principles. Other operational principles such as efficiency and effectiveness were raised as well as the
importance of country ownership (reaffirmed by several TC members, e.g. China, India, Japan; Russia
highlighting direct access as a guiding principle) and predictability of finance (Ethiopia, India). The
issue of which costs to cover (incremental, additional, full costs) was given relatively little attention.
What seems to be largely agreed is that there is a need for a much more concise document which
includes (and maybe even is limited to) the key purpose, scope and principles that should guide the
Fund (Australia, Canada, Germany, Italy, Pakistan, USA). What became apparent is that workstream I
is crucial in so far that the purpose and the principles applied have a guiding function for the other
workstreams at least to a certain extent, why it is envisaged to agree on some substantial issues by the
3rd meeting, in order to allow fine-tuning in the other workstreams in line with the overall objectives
and principles.
4. Workstream II: Governance and institutional
arrangements
For the preparation of the discussions on workstream II, a scoping paper on governance and
institutional arrangements had been prepared by the TSU, as well as background papers on the legal
status of different existing funds, on direct access and rules of procedure in other funds.
Presentation by co-facilitators
The oral input by the co-facilitator from the Democratic Republic of Congo highlighted, in addition to
the scoping paper which also includes the areas of perceived convergence, issues where there are
diverging views which need to be addressed. These include the following:
- Should the GCF function as a trust fund (through grants that are disbursed), or should it be
designed more like a financial institution working with a variety of financial instruments?
- Is a distinct legal personality required to provide for direct access, or would the legal status of
the trustee be sufficient for the operations of the GCF?
- What is the relationship between the COP and GCF?
- How and by whom should the Board members be elected?
- What does “independent Secretariat”, as contained in the Cancún decision, mean exactly?
- What should the relationship between the Board, the Secretariat, the implementing agencies
and the trustee look like, in addition to the guidance given by 1/CP.16?
- What should the procedures look like for selecting a permanent trustee?
Discussions among the TC members
Not surprisingly, much of the discussion focused on some of the aspects addressed in the initial
presentation of the co-facilitator.
4Countdown to Cape Town: Germanwatch report on the 2nd meeting of the Transitional Committee
Regarding the legal status, a number of countries (Brazil, Barbados, Egypt, Zambia, Pakistan) pointed
to the need for a distinct legal personality. Since a permanent trustee has not yet been selected (and
there may even be changes of the trustee in the future), there are good arguments for a distinct legal
status. The background paper prepared for this meeting contains more detailed considerations of the
different options currently applied in existing funds. The German TC member pointed out the need for
a more in-depth consideration by the TSU of whether a distinct legal personality might have adverse
effects on the variety of instruments that the GCF may be able to use. However, there was no explicit
rejection of the overall need for distinct legal personality, as also the co-facilitator from Switzerland
pointed out in his summary.
On the selection of Board members, there was a debate about whether the Board members should be
selected only by their constituencies, or would need to be appointed by the COP. While the USA
clearly pointed out that they do not see a role for the COP but that the constituencies should determine
their procedures, Brazil expressed the need for the COP to elect the Board members. Since de facto –
that shows the experience from other institutional selection procedures in the UNFCCC – the key
factor is the agreement on individuals within the constituencies, and the election through the COP is
usually more a step of formal recognition, this controversy seems less relevant than it is perceived.
Generally, further details on the distribution of the 24 Board members seats are required in order to
operationalise the GCF. This should also include a clear possibility for selected representatives from
non-governmental constituencies (civil society, private sector etc.) to at least serve as non-voting
members.
However, what appears to be an important task for the TC is to at least provide clear guidance on the
overall expertise that is required within the Board so as to make governments nominate experts which
are send to the GCF Board because of their specific expertise, and less so because of other political
motives or hierarchies that need to be followed. It is clear that such expertise should not only address
financial management, but broader aspects that are relevant to the operations of the fund, such as
experience in the application of environmental and social safeguards, gender, or monitoring and
evaluation. Noteworthy was the suggestion by Zambia that overall the Board should be gender-
balanced. (Throughout the meeting the need for gender considerations was highlighted by different TC
members, including the South African co-chair, Pakistan and Italy.)
On the selection process for a permanent trustee, some countries mentioned the need for an open
bidding process (Egypt, Brazil), which was not explicitly rejected by anyone. However, what also
became apparent from the debate is that this is not the most urgent issue to focus on, since the interim
trustee World Bank has been selected for three years, and for reasons of timing no decision is required
now (Switzerland, Pakistan).
5. Workstream III: Operational Modalities
For the work of workstream III, a number of background papers were prepared by the TSU.9 An
additional input was the technical workshop which happened the day before the TC meeting and
which included an overview on different funds and their experience as well as inputs from civil society
and private sector. However, late notice as well as lack of funding seemed to have hampered the active
and broad engagement of both constituencies.10
The two scoping papers on operational modalities – finance entry points and accessing finance – were
the key basis for TC members to start their discussions. As in previous workstreams, the co-facilitators
gave an overview presentation of the key aspects.11
Presentation by co-facilitators
On finance entry points, the co-facilitators presented the following areas of potential convergence:
- “The GCF needs to be equipped to handle a broad range of possible financing sources.
9
Background notes on: financing instruments, windows, and direct access, see
http://unfccc.int/cancun_agreements/green_climate_fund/items/6038.php
10
See http://unfccc.int/cancun_agreements/green_climate_fund/items/5855.php for background information, the
workshop was not webcasted.
11
See http://unfccc4.meta-fusion.com/kongresse/tc02/pdf/WSIII_TC2_14July11_new.pdf and
http://unfccc4.meta-fusion.com/kongresse/tc02/pdf/WSIII_TC2_furtherwork_14July11.pdf for download
5Countdown to Cape Town: Germanwatch report on the 2nd meeting of the Transitional Committee
- Two broad categories of finance: government contributions and non-government
contributions/sources.
- There could be two main means of mobilising contributions: a replenishment cycle (relevant
to government contributions) and a system of continuous inputs (relevant to all contributions).
- It will be important for the GCF to mobilise and leverage private sector resources. To explore
this, the TC could agree a strategy/platform to engage the private sector.
- Least developed countries (LDCs) and small island developing states (SIDS) face particular
challenges in attracting private finance.
- Private sector finance, both at the national and international level, can be leveraged by the
GCF through the provision of incentives that lower risk and mobilise the private sector to
generate climate finance.”12
On managing finance, the following aspects were highlighted:
- The GCF will have a number of thematic funding windows;
- An initial set of windows could be established with the Board able to review and create further
windows in the future;
- Thematic funding windows could be organized by scope (e.g. adaptation, mitigation,
REDD+), geographic/economic grouping (e.g. SIDS and/or LDCs), type of funding/access
(e.g. a private sector window and a direct access window), or some combination of these;
- Initial windows could be Adaptation and Mitigation;
- There are also cross-cutting themes between windows.
On accessing finance, the following areas of convergence were identified by the co-facilitators:
- “The GCF should use a range of instruments to disburse finance to ensure delivery of finance
at scale and across a range of activity types.
- Grants should have a prominent role within the range of instruments used by the GCF to
disburse finance, but the GCF could also use non-grant financing instruments to finance
identified activities.
- The GCF’s access modalities should promote wide and equitable access to the GCF. A range
of access modalities should therefore be available simultaneously.
- The GCF’s access modalities could consider expanding the range of entities that have to date
been able to access financing through other funds.
- Sound fiduciary management and functioning, robust institutions are prerequisites to the
integrity of the GCF’s access modalities, including direct access
- Use of country systems and institutional arrangements are important for the effective and
equitable delivery of GCF resources. National climate and development plans could play a
role within the GCF to ensure its activities are country-driven” 13
Further it was highlighted in the presentation that agreement should be reached on the following
issues: types of financing inputs, the process for raising funds, thematic funding windows, access
modalities, and an approach to crowd in the private sector.14
Discussions among the TC members
A substantial part of the debate – not only under this workstream - circled around the issue of
windows. Several TC members proposed different sets of certain thematic windows (e.g. Germany,
Ethiopia, Korea, Congo, Singapore). Adaptation and mitigation were frequently mentioned, as well as
REDD+, but also some additional options. Others referred to the option of having windows
disentangled from the funding purpose (e.g. UK, Italy, Switzerland) inter alia pointing to the fact that
allocation to specific purposes (adaptation, mitigation etc.) would not necessarily require specific
windows (UK, Egypt). These more instrumental (and not thematic) window options could include
windows for the private sector, grants/direct access, concessionary/intermediary finance. Even if most
of the TC members who commented on the window issue spoke in favour of thematic windows, the
debate clearly showed that there is still the need for a more consolidated understanding of what a
12
See http://unfccc4.meta-fusion.com/kongresse/tc02/pdf/WSIII_TC2_14July11_new.pdf
13
See http://unfccc4.meta-fusion.com/kongresse/tc02/pdf/WSIII_TC2_14July11_new.pdf
14
See http://unfccc4.meta-fusion.com/kongresse/tc02/pdf/WSIII_TC2_14July11_new.pdf
6Countdown to Cape Town: Germanwatch report on the 2nd meeting of the Transitional Committee
“window” would exactly mean and what it would have to achieve. However, the discussions also
provided proposals which would allow combining the different intentions that are behind the
proposals.
What was expressed clearly by a number of developing countries (e.g. India, Pakistan, Zambia) is that
contributions to the fund should not be earmarked by the donors for specific purposes, but that
the Board would have to ensure that the available resources are used in a balanced manner based on
the needs identified by the recipient countries, and in line with the purpose of the GCF.
The modalities for raising funds were another matter of debate. Since there is not yet an innovative
public funding source for climate purposes in place, a conventional approach of government
contributions is the key option to initially fill the fund. Therefore, several countries raised the
importance of a replenishment cycle (e.g. Canada, China, Sweden, Pakistan, Singapore) which at least
for a certain period would ensure predictability and reliability of the available funds, and could of
course be complemented by additional sources. Only Saudi Arabia raised explicit concerns over the
use of innovative sources, while there seems to be broad agreement that the GCF should be flexible to
receive money from a number of sources.
The debate about the role of the private sector reflected that there is not a clear understanding yet
how the private sector should be engaged exactly (and how it wants to be engaged). While there seems
to be agreement that the private sector in general has to play an important role in investing into climate
technologies and low-carbon development (less so in adaptation), an open question is whether private
sector investments would be incentivised through appropriate policy frameworks on the level of
developing countries funded by the GCF, or whether the GCF in addition would offer direct support to
the private sector through different instruments (e.g. through a specific window, as some proposed).
Given the little focus in the debate so far, it is valuable that the scoping paper contains much more
background on the different options, and a specific consultation process for the private sector is being
pursued by the co-facilitators.15 Several TC members also suggested to have a workshop focusing on
the private sector.
Other issues mentioned (but in less detail) were how direct access could be designed, the role of the
TC in mobilising funds for the GCF, the relationship of grants and loans etc.
Clearly missing in this debate was the potential role of country-level multi-stakeholder
partnerships, which has been vaguely mentioned in the scoping paper and has been raised by some
TC members´ earlier submissions (e.g. France, Germany, Switzerland and Denmark). They could be a
key element for the development and oversight of country-led strategies.
6. Workstream IV: Monitoring and Evaluation
The guidance entailed in the Cancún decision stipulates that a workstream on monitoring and
evaluation has to address two issues. First, it has to address how a mechanism to ensure periodic
independent evaluation of the performance of the GCF could be designed. Second it needs to consider
ways to ensure financial accountability and the evaluation of the performance of activities with regard
to environmental and social safeguards, fiduciary standards and sound financial management. In order
to provide relevant information, two background notes were prepared by the TSU, on a) different
options for independent evaluation mechanisms, and b) applied minimum fiduciary standards in
selected funds.
Presentation by co-facilitators
The presentation given by the co-facilitators, interestingly, varied from the approach of previous co-
facilitators in so far that it did not try to map out areas of convergence, but made very concrete
proposals on the different items.
On the independent evaluation of the GCF, it was proposed the following:
- “the decision to evaluate to be taken by the COP;
- to be carried out by an independent evaluation institution – based on international competitive
bidding;
- reporting to the COP;
15
See http://unfccc.int/files/cancun_agreements/green_climate_fund/application/pdf/tc2_ws3_1_300611.pdf
7Countdown to Cape Town: Germanwatch report on the 2nd meeting of the Transitional Committee
- shall be based on the overall objectives of the GCF (WS I);
- shall include a stakeholder perspective;
- shall be aligned with the overall objective of the UNFCCC.”16
Finally, the co-facilitators highlighted six next steps:
- “Develop principles for an independent evaluation of the overall performance of the Fund
[…];
- Develop principles for Monitoring and Evaluation system for projects/programs […];
- Develop principles regarding application of fiduciary standards and financial accountability as
well as for environmental and social safeguards in relation to the Evaluation Unit;
- Develop Key Performance Indicators and key elements of a framework that can support a
results-based management model;
- Define division of responsibility between the TC and the Board on the above issues.” 17
Discussion among TC members
The following discussion among the TC members picked up some of the points raised by the co-
facilitators. Interestingly, the approach by the co-facilitators to kick-off discussions with a concrete
proposal was welcomed by the first speakers (e.g. USA, Brazil, Germany).
What was positively highlighted by a number of TC members was the crucial importance of a sound
monitoring and evaluation approach for the GCF and its operations (e.g. USA, Japan, Brazil, Burkina
Faso, Australia), also in order to generate the necessary support within parliaments in the developed
countries which usually have the last say on financial contributions to multilateral funds (e.g. USA,
Japanese minister). A general lesson also from the work of other funds was highlighted, namely that it
is important to consider the monitoring and evaluation system early-on, which underlines the
importance of dealing with it in the TC.
The question of who would guide the overall evaluation of the GCF´s performance became
controversial in particular because of the relationship to the COP. Especially the USA see the GCF
Board in the lead role to coordinate the evaluation of the GCF performance, while others pointed to
the fact that this would not really reflect the idea of a truly “independent” evaluation where neither the
Board nor the Secretariat should be involved (e.g. Egypt, Sweden). And in fact to some extent the
Board would be responsible for evaluating its own performance since it will be part of the GCF
institutional set-up. Here some Parties raised the important role of the COP and/or the Standing
Committee on Finance which is tasked to assist the COP in exercising its functions related to the
financial mechanism (e.g. Pakistan, Zambia, India, China indirectly). While it will take some years
until the first performance evaluation will have to be carried out, it is of course a very fundamental
decision which needs to be taken early-on.
Another matter of debate were the fiduciary standards that need to be applied in order to ensure
appropriate use of the resources through the agencies that will be tasked to oversee implementation, be
it under direct access or under other access options. The TC needs to find the right balance between
standards that are high enough to guarantee trust into the system and their applicability in developing
countries with different circumstances (issue addressed by Germany, Zambia, India, Pakistan). A
politically useful starting point are the fiduciary standards applied in the Adaptation Fund, as pointed
out by Pakistan. They have already been agreed upon by all Parties to the Kyoto Protocol, and can be
regarded as high standards which were developed based on internationally applied standards,
including in coordination with the World Bank as the interim Trustee of the AF.
A difficult issue is the question whether and if how the performance of the GCF should be
evaluated against higher level objectives such as its contributions towards a below 2°C emission
reduction path. While Germany highlighted the importance, India pointed to the difficulties of such an
approach. This has of course repercussions to the debate under workstream I. More consolidated work
is required to show how such an important overall objective like the 2°C trajectory or the
transformational impacts of the GCF can be operationalised adequately and efficiently within the
scope of the GCF, without creating too complex monitoring and evaluation structures.
16
http://unfccc4.meta-fusion.com/kongresse/tc02/pdf/WSIV_TC2July_Final.pdf
17
http://unfccc4.meta-fusion.com/kongresse/tc02/pdf/WSIV_TC2July_Final.pdf
8Countdown to Cape Town: Germanwatch report on the 2nd meeting of the Transitional Committee
The debate also reflected broad agreement and support for a meaningful inclusion of multiple
stakeholders in the monitoring and evaluation procedures (e.g. Egypt, Japan, Singapore). Furthermore,
it was underlined that any evaluation and review process must also result in action (Singapore), and
this needs to be ensured through the relationship between the different bodies. It is also important to
look for indicators which address the specific climate-related impacts that the GCF is tasked to
achieve, in addition to more general indicators of effective project implementation.
7. The way forward: Countdown to Cape Town
One of the most decisive outcomes of the 2nd TC meeting was the agreement on a way forward. Given
the scarce time that is left until the Durban COP, and the high expectations towards delivering an
outcome which operationalises the Green Climate Fund in a promising manner, this is crucial. Key
elements of this agreement are a timeline, the key deliverables to be presented for discussion to the TC
and the responsibilities. Table 1 outlines the timeline for the months to come, and key deliverables.
For the TC members, the October meeting in Cape Town is the envisaged end-point of their 2011
journey, and given the proximity to the ministerial Pre-COP which is expected to happen immediately
after the TC meeting, the TC can give the Durban preparations a positive, upward spin if they agree on
an ambitious operational document.
Table 1: TC Timeline until Durban
Date Event Content, result envisaged18
29 July Submission deadline for inputs into addition of key issues lacking or
TC process underrepresented
28 August Draft outline of the report to the Unclear how much content it will
COP to be submitted to TC contain
members
11 September Technical workshop in Geneva Focus remains to be identified,
proposed areas to focus on inter
alia engagement of private sector,
concept and means of
“transformational”, interaction
with private sector and civil society
12 to 13 September 3rd TC meeting in Geneva Approval of the draft outline of the
report
19 to 21 October 4th TC meeting Adoption of the report to be
presented to the COP
27 November to 11 December COP17 in Durban Operationalisation of the GCF
through approval of foundation
document
The draft outline of the report to the COP which should be distributed by the end of August will be a
crucial document for the TC to consider at its third meeting. What has not been clarified at the recent
TC meeting is how much detail this draft report will contain. The explanations by the co-chair Trevor
Manuel, South Africa, remained a bit vague at the end of the meeting, which of course leaves some
flexibility for the group that now has to manage the process in preparation of the meeting.
Nevertheless it is clear that the aim will be to work towards one, much more concise document which
covers the different workstreams and addresses their linkages. Feeding into this process through
concrete textual proposals can facilitate the work of the co-chairs and the other responsible TC
members to come up with concrete texts, potentially including options on issues of divergence or even
compromise language, and should be pursued now by TC members as well as observers.
In that regard it was quite remarkable that in the last part of the session 13 developing countries19
tabled a jointly prepared and quite comprehensive “draft instrument for the establishment of the Green
Climate Fund”, as an impulse to move the process forward.
18
As interpreted by the author
9Countdown to Cape Town: Germanwatch report on the 2nd meeting of the Transitional Committee
In terms of responsibilities, the three co-chairs from South Africa, Mexico and Norway, the two newly
elected vice-chairs from Singapore and Australia, and the eight co-facilitators of the four workstreams
(see table 2) will now jointly lead the work towards the next meeting.
Table 2: Workstreams and co-facilitators
Workstream Co-facilitators
WS1: Scope and guiding principles Spain and Barbados
WS2: Governance and institutional arrangements Switzerland and Republic of the Congo
WS3: Operational modalities Australia and Pakistan
WS4: Monitoring and Evaluation Sweden and Bangladesh
Overall, about a third of the TC members will be engaged in the management of the process now. All
regions are represented, and there is a balance between developed and developing countries. The co-
chair from South Africa, Trevor Manuel, made quite some effort to explain that it is the objective to
make the process as participatory and inclusive as possible for all TC members, but at the same time
being efficient and following a process which is manageable. Reflecting the comments given by the
TC members, this view was generally shared.
Furthermore noticeable is the announcement from Japan and Australia that they will organise, apart
from the official TC process but of course closely linked to it, a regional consultation meeting
focusing in particular on the engagement of the private sector. Other TC members in other world
regions should think about similar initiatives which do not only address the private sector but which
also invite civil society to present their views. In terms of timing, it would be good to place it before
the release of the draft report to the COP on 28 August, as well as in between its release and the 3rd TC
meeting in order to provide input in this crucial phase.
Overall, this TC meeting can be regarded as a step forward, since it helped to clarify the understanding
and views on some of the key issues, regarding divergence as well as convergence. Relatively little
time was spend on procedural matters. An important outcome was the agreement on a timeline for the
next steps. However, it also showed that much more work needs to be done to consolidate some of the
aspects, and more thoughts should also be spend on what level of detail needs to be achieved by the
end of the year to really operationalise the Green Climate Fund so it can start its work next year. This
also has to include consideration of the arrangements, a Memorandum of Understanding or a different
kind of document, between the COP and the Green Climate Fund that are required to ensure it is
accountable and functions under the guidance of the COP so that the GCF does not start its work
levitating.
Finally, Parties will have to work towards avoiding the GCF will start empty. To fill the fund initially
with some resources so that it can start disbursement sometime in 2012 needs to be ensured. There are
a number of opportunities to move forward on this front, from the G20 finance ministers process
which will hopefully achieve substantial progress on the implementation of innovative public sources
for climate finance, but also the at least two remaining ministerial meetings in the run-up to the COP,
of which the meeting in early September in Cape Town intends to focus on finance and other means of
implementation.
Thus, a lot of work remains to be done both within the TC and in outside processes. in order to be able
to celebrate the actual birth of the Green Climate Fund in Durban and to lay the foundation for a
strong future pillar of the climate finance architecture .
19
Introduced by Egypt, on behalf of the members from Argentina, Burkina Faso, China, Democratic Republic of Congo,
Egypt, El Salvador Gabon, India, Morocco, Nicaragua, The Philippines, Saudi-Arabia, Zambia. The paper was distributed to
TC members and, as stated by Egypt, does not preclude further submission of views by these 13 TC members.
10You can also read
