Slow progress in setting up UN-backed funding mechanism causes confidence to dip to a new low
By Sophie Yeo
Delays in setting up the UN’s green bank have forced Sweden to postpone a promised US$ 45million contribution, which the government had pledged to deliver by the end of 2014.
Sweden will now have to split its donation of 300 Swedish krona (SEK), equal to around $45m, with only half going towards the Fund this year.
The other half will be delivered in 2015, conditional on the GCF becoming ready to receive the money.
Tanja Rasmusson, State Secretary for International Development Cooperation, told RTCC that delays to the Fund’s establishment have made it difficult for Sweden to schedule the delivery of the money.
“Since the Fund is not yet operational and since it has yet to be decided when the initial resource mobilization of the Fund will take place, it is not possible to establish at this stage exactly when the Swedish contribution will be disbursed,” she said.
The money was initially pledged by Sweden’s environment minister Lena Ek in a speech at the UN’s climate conference in Warsaw last year. Sweden is prepared to provide 300 SEK to the Fund in 2014, she said, “when it becomes operational with all the necessary arrangements and standards in place.”
At this stage, negotiators remained hopeful that the Fund could become operational in 2014, which could drive politicians to make further financial pledges come Ban Ki-moon’s climate summit in September and the UN’s annual climate conference in December.
The GCF is a crucial part of the UN climate machinery, as it will be largely responsible for channelling the US$ 100billion in climate finance that rich countries have pledged to developing countries every year from 2020.
But progress on the Fund has been slow, and its coffers remain largely empty. Sweden’s pledge remains the largest so far, alongside another $40m pledge from South Korea, where the Fund is based. Other donations, such as that made by Indonesia in February, have been in the hundreds of thousands.
As of March last year, before the pledges of South Korea and Sweden, promised money amounted to just US$ 8.24 million.
Now it looks increasingly unlikely that the Fund will be ready this year, with the most recent Board meeting in Bali resolving just two out of eight issues that must be smoothed out before the Fund can launch, leaving a heavy burden on a final meeting in May.
“When deciding on its spending priorities, the Government believes a deferral of the disbursement of half of the announced 300 million to 2015 is a reasonable decision given that the GCF is a Fund that has yet to become operational,” said Rasmusson.
Sweden is not alone in doubting the efficacy of the GCF. UK climate negotiator Pete Betts told RTCC in March that the UK was ready to make a contribution to the Fund, but had been prevented from doing so by its lack of preparedness to receive the money.
Clarisse Siebert, a research fellow from the Stockholm Environment Institute, told RTCC that the Green Climate Fund had already “shot itself in the foot” through its inability to “get itself off the ground”.
“When one countries decides not to donate, it shows there’s a lack of confidence in how its going,” she said. She added that Sweden’s environment minister, Lena Ek, has shown that she is “very committed” to the Fund.
A spokesperson from the Green Climate Fund Secretariat told RTCC that the Fund is preparing to launch its initial resource mobilisation later this year.
She said: “Sweden is represented on the Board of the Fund, and we are working closely with Sweden, as with the other Board members, to prepare the Fund for its initial resource mobilization.”