Green Climate Fund lowers cash demands to $10bn

Pressure rising on governments to back UN’s green bank ahead of Ban Ki-moon’s New York summit

By Ed King

The UN’s flagship Green Climate Fund has scaled back plans to raise US$ 15 billion by the end of 2014, with a new goal of $10bn.

Senior government officials from developed countries met in Bonn this week for technical discussions over the fund’s development.

So far only Germany has pledged significant backing, with chancellor Angela Merkel offering $1 billion the day after the country won the football world cup.

In June, GCF chief Hela Cheikhrouhou said she was seeking up to $15 bn, which would then be disbursed over a three year period.

Other developed countries such as the UK and France have promised to contribute, but not specified how much. They are believed to be waiting to get a better understanding of how the fund will work.

UN officials hope more potential donors will come forward at secretary general Ban Ki-moon’s New York summit on September 23.

In a statement, the UN’s chief climate official Christiana Figueres said more support for the GCF was now urgent.

“Governments need to move from words to deeds. Between now and the next UN climate change convention in Lima the capitalisation of the fund must begin,” she said.

“Initial funding of US$10 billion would be a good start and a good signal of intent as the world looks forward to a new climate agreement in 2015 that is both universal and meaningful.”

In a separate media call Figueres said she hoped businesses would also contribute to making the GCF a success, but would not be drawn on the level of backing she expected.

“There is increased recognition that there will need to be very smart leveraging of the public sector funding that will be coming through in order to de-risk investment from private sector,” she said.

She added: “What we actually need is a trillion dollars a year.”

The fund is deemed critical for developing countries wishing to move away from fossil fuels to low carbon energy sources.

In 2010, heads of state agreed to deliver $100 billion by 2020 to help emerging economies, but according to the Overseas Development Institute only a fraction of that has materialised.

The GCF board will meet in Barbados in October ahead of a “pledging conference” in November when the full extent of national contributions are likely to become clear.

Read more on: Climate Finance | Green Climate Fund