The UN’s flagship climate finance initiative was gripped by a dispute this week over what a project to cope with the impacts of climate change looks like – and who gets to decide.
Tensions rose during the online board meeting of the Green Climate Fund (GCF) after only one out of three adaptation projects submitted to the fund’s secretariat was presented to the board for approval.
Two adaptation projects and one project with both adaptation and emissions-cutting elements didn’t make it pass the fund’s technical advisory panel.
The independent body said it wasn’t clear if the projects were focused on climate adaptation, as opposed to general development, and historical data was lacking.
One of the rejected projects was to “build resilience to hydro-meterological hazards” in Timor Leste, with a large share of funding earmarked for fire trucks. The technical panel deemed the project’s climate impact to be “weak”. While drought and heat can drive wildfire risk, slash and burn techniques to clear land were seen as the dominant cause of fires.
The result was that the board only had four bids to consider, instead of seven, and the balance tilted towards mitigation. All four worth $501 million were approved. In grant equivalent terms, just 18% went to support communities coping with erratic weather and sea level rise.
“It is no longer acceptable to come to the board and be presented with such a deeply imbalanced portfolio,” said Richard Muyungi, of Tanzania, representing African nations.
Victor Viñas, of the Dominican Republic, told the meeting the technical body alone shouldn’t have the power to veto adaptation projects.
“This is unfair to least developed countries,” shouted Jeremiah Sokan, of Liberia. “You are not putting money in the GCF to deprive vulnerable countries. And let people die because they don’t have the data. That’s not what we are for!”
In a fiery exchange, Sokan accused the chair of the technical panel Daniel Nolasco of considering himself “a demi-God” for denying these projects — remarks for which he later apologised.
Sokan added that requesting low-income countries, with low institutional capacity, to provide 30 years of climate impact data was “automatically impeding countries to access funding”.
Nolasco insisted national circumstances were taken into account when judging the projects and called for policy guidance from the board.
Board members from developing countries said rules that prevent projects that haven’t been endorsed by the technical panel to reach the board should be temporarily suspended until more robust guidance could be provided to the panel. Members from richer nations opposed the idea, pushing the debate to the next meeting.
The GCF has committed to split its funding 50/50 between adaptation and mitigation projects, in grant equivalent terms – which it is on track for. But in nominal terms, 66% of funding has so far been allocated to mitigation projects, against 34% for adaptation.
While donors face calls from recipient countries to close the adaptation finance gap, the climate credibility of such initiatives is under scrutiny. Many have been accused of inflating adaptation funding figures by counting spending on earthquake resilience, for example.
In a statement following the meeting, GCF executive director Yannick Glemarec promised to “step up our efforts to prioritise adaptation projects for our next board meeting”.
After repeated delays and wrangling over procedural issues, the board agreed to partner with the fossil-fuel backing Japanese bank Sumitomo Mitsui Financial Group (SMBC).
SMBC was accredited by the fund after the bank announced in May that it will no longer finance newly planned coal-fired power plants and the expansion of existing plants.
But campaigners say the bank’s new policy is “misleading” and includes loopholes that could see support for coal projects that use “clean coal technologies” and the co-firing of coal with biomass, with carbon capture and storage for example.
And the bank has no plans to phase out support for oil and gas. SMBC is involved in oil and gas pipelines in the US, Canada, Uganda, Mozambique and the Balkans.
More than 450 organisations signed a petition urging the board to reject the bank’s bid.
Lidy Nacpil, of the Asian Peoples’ Movement on Debt and Development (APMDD), described the accreditation decision as “a big letdown for people and climate”.
“SMBC is among the world’s biggest fossil fuel financiers. It will now have access to climate finance, which are public funds intended to support developing countries most vulnerable to climate change. These are countries devastated by fossil fuel projects supported by this dirty company,” she said.