Green Climate Fund must take risks in warming fight, says new head – Reuters
BARCELONA (Thomson Reuters Foundation) – The Green Climate Fund can become a “completely unprecedented” tool to ramp up action on climate change in developing nations, allowing states, companies and communities to experiment more – as long as its coffers are refilled this year, its new head said.
In his first interview since starting a month ago, Yannick Glemarec described the fund as the “financial alchemists of climate change”, because it can design funding to meet needs.
But if governments fail to deliver a “successful and ambitious replenishment” of the fund’s depleting resources, its ability to transform responses to global warming will be hobbled, he warned.
The Green Climate Fund (GCF), set up by U.N. climate talks in 2010, began approving projects in 2015 to help poorer nations develop cleanly and cope with wilder weather and rising seas.
It has 84 partners – from commercial and development banks, to state agencies and civil society groups – who do the work on the ground and look to the fund to help them test innovative approaches. That would stop without new cash, Glemarec said.
“It is very important that when they ask us to help them to deliver, we are in a position to be there, and that we have enough resources also to take risk,” the executive director, who is French, told the Thomson Reuters Foundation.
So far, for instance, the fund had provided different types of support to push the envelope on renewable energy, he noted.
That has ranged from helping put in place power purchase agreements and cheap finance for the world’s biggest solar plant in Egypt, to providing equity capital for small businesses working on off-grid energy in Kenya.
Glemarec said the GCF expected to allocate this year all the remaining money from its first fundraising push in 2014, which resulted in pledges of more than $10 billion.
That amount fell, however, after U.S. President Donald Trump refused to deliver two-thirds of a $3-billion promise made by his predecessor and as currency fluctuations shaved off a further $1 billion, according to analysts.
The fund, based in South Korea, has committed about $5 billion to more than 100 projects in developing countries, with about $2 billion of that now being spent.
In the coming months, the GCF will make the business case to donor governments for more cash, asking for a second round of pledges at a conference in the autumn, Glemarec said.
It is too early “to try to read the tea leaves and come up with a guess on where we could land” in terms of a financial target, he told the Thomson Reuters Foundation.
But he welcomed announcements already made by Germany and Norway that they would double their initial contributions, describing it as “an extremely positive signal”.
The fund hopes “a couple more countries” will announce fresh money at a climate change summit organized by the U.N. secretary-general in September. That would “bode very well for the full pledging session” to come soon afterwards, he said.
The fund also aims to solicit contributions from philanthropic foundations in the future to broaden its donor base, and to collaborate with them on projects in areas such as agriculture, he said.
Farming is “the lowest-hanging fruit” in the push to drive adaptation to worsening extreme weather linked to climate change, Glemarec said.
“A small farmer is an investor – and somebody who will invest under an extremely high level of uncertainty,” he said.
There are many ways the fund could help reduce their risks, he noted, such as giving them access to insurance and financing the construction of resilient infrastructure.
“It is an area in which we can make a huge difference,” he added, noting security of food and water supplies was as high a priority as access to clean energy in a warming world.
Every agriculture project backed by the fund must benefit women farmers as much as men, said Glemarec who was previously deputy executive director for policy and programs at UN Women.
Providing women farmers with equal access to land, finance, technology, information and markets could increase their productivity by up to 25 percent in sub-Saharan Africa – and help meet global development goals, he noted.
Work to adjust to climate shifts still lags behind action to reduce planet-warming emissions, but the GCF – which has a mandate to put half its resources into adaptation – is working with the private sector on ways to speed that up, he said.
Investing in cold storage to keep farmers’ produce fresh, for example, could “dramatically increase” their productivity – but individual projects are often too small to attract large sums of capital, Glemarec said.
The GCF and its partners could take hundreds of small loans for cold storage and consolidate them into a bond to offer to financial markets, or provide credit lines to banks so they could lend to farmers to invest in refrigeration.
“Climate change (action) started very much with … the energy transition, so a lot of proven models are in (that) field,” Glemarec said.
“But there is no reason why we could not do it in other areas.”
Reporting by Megan Rowling @meganrowling; editing by Laurie Goering. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, women’s and LGBT+ rights, human trafficking and property rights. Visit news.trust.org/climate