How the Green Climate Fund’s host city will impact future climate change action

Charged with the task of raising $100bn a year of climate finance by 2020, the Green Climate Fund has a huge task ahead of it. With much of its work so far being largely procedural, it will make its first big decision on Saturday October 20 when it selects its host city. Louise Brown from the World Resources Institute explains how the choice could impact climate action efforts in the long term.

By Louise Brown

The second meeting of the Green Climate Fund (GCF), the institution that’s expected to become the main global fund for climate change finance, is taking place this week in Songdo, Korea. While the Board will discuss several issues everything from criteria for its executive director to hammering out a work plan – one is likely to take centre stage: choosing the Fund’s host country.

Six countries are currently vying for the role: Germany (Bonn), Korea (Songdo), Mexico (Mexico City), Namibia (Windhoek), Poland (Warsaw), and Switzerland (Geneva). The decision is an important one – the appointed country will be tasked with providing a home for one of the main vehicles to help the world’s most vulnerable nations mitigate and adapt to climate change.

Why does this decision matter?

The GCF, officially established at the Durban climate change conference last year, is seen by many countries as an opportunity to create a legitimate institution that will enable scaled-up delivery of climate finance. If designed correctly, the GCF can distribute funding to help shift developing countries – typically seen as the nations most vulnerable to climate change – toward low-carbon, climate-resilient infrastructure and economies.

The host country will play an important role in ensuring that the GCF fulfills its responsibility. This nation will need to be able to provide an environment in which the Fund can be established promptly as an independent, legal entity that can function effectively. Significantly, the choice of country provides an opportunity to send a strong signal of the Fund’s commitment to be a transformational institution that will do things differently.

The Green Climate Fund will become the largest distributor of climate finance once it becomes operational in 2014. (© Kuyasa CDM)

Factors to consider

There are a number of considerations that the Board will need to keep in mind as it makes its decision on a host country – namely, issues of practicality and legitimacy.

For example, apart from establishing the Fund as a legal, operational entity, the host city will need to provide appropriate facilities for the GCF to function effectively. This includes buildings, conference centres, and telecommunications networks, as well as attractive conditions for staff, such as good health care, education, local and international transport, affordable costs and quality of living. A number of countries have put forth attractive offers of financial resources to support the start-up of the Fund.

The Board will also need to consider issues of equity and legitimacy. The vast majority of climate-related funds and institutions are located in developed countries. Hence selecting a developed country would naturally give many the confidence that the Fund will get off to a smooth start.

However, Board members would send a strong signal of the GCF’s commitment to “promote a paradigm shift” if they select a developing country as host.

The presence of the GCF could also have profound implications for the development of climate change leadership in its host city and region. The GCF will attract expertise from around the world – its host city and country will become a hub of climate change action and could act as an influential promoter of low-carbon, climate-resilient development throughout the region.

What’s in store for the future?

Choosing the host country won’t be the only topic up for discussion at the GCF Board’s second meeting. The Board will also outline criteria for selecting an Executive Director of its secretariat, as well as decide on arrangements for the participation of official civil society and private sector observers to the GCF meetings. The Board will also need to agree on a work plan for making the GCF functional, including decisions around its strategy and business model, operational elements, and accountability mechanisms.

But all eyes will be on which country receives the honor of hosting the GCF. All six have made a compelling case for their bid, and the decision will not be an easy one. Whichever country earns the nomination will have a difficult but critical task before it: to provide the setting for the Fund that will help contribute to global action on climate change.

This article was originally published on the WRI website.

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