Money is always an issue. You need money to buy food, water or electricity. You need money to rent an apartment or buy a car. Likewise, addressing climate change requires money. Money is needed to invest in clean energy and green technology, and to build up defenses against rising seas and worsening storms, floods and droughts. When you buy items for yourself, it is clear that you will pay, since you will garner the benefits of the items. However, the issue of global climate change has widespread costs and benefits. The issue here is who should pay money for addressing climate change, and how much.
A key financial mechanism of the UNFCCC is Green Climate Fund. The fund was established at COP 16 as an operating entity of the financial mechanism of the UNFCCC, in accordance with Article 11 of the Convention. The fund supports projects, programs, policies and other activities in developing country Parties. The initial target of the fund is $10 billion, which was set by the Executive Secretary of the UNFCCC, Christiana Figueres. Furthermore, the developed countries committed to provide funds rising to $100 billion per year by 2020 to support concrete mitigation actions by developing countries.
Although many developed countries hesitated to pledge money to Green Climate Fund up until recently, progress has been made in the lead-up to COP20. At the time of UN’s World Leaders’ Climate Summit in September 2014, pledges made toward Green Climate Fund’s initial capitalization totaled only $2.3 billion. Watching this low level of commitment by developed countries, African countries have warned that if the developed countries fail to achieve $7 billion for the fund by the December COP, the chances of a UN climate deal in 2015 will be dead.
The turning point was a US and Japanese pledge to the fund. In a joint press release on November 16th 2014, the United States and Japan announced a total of up to $4.5 billion in pledges to the Green Climate Fund, including up to $3 billion from the United States and up to $1.5 billion from Japan. Although we need to notice that both U.S. and Japan seek approval from Congress or Diet for the funds, this announcement likely urged other developed countries to pledge to the fund as well. At last week’s meeting in Berlin, thirty countries pledged $9.3 billion to the Green Climate Funds including 1.1 billion from UK. If this momentum continues, the Fund will likely reach $10 billion initial target by COP20.
During COP20, countries have an opportunity to make a national statement. The COP needs to urge remaining developed countries to commit to the Green Climate Fund. I hope that we will be able to see that $10 billion initial target achieved at the COP20. But the real issue remains whether the US and other developed countries can achieve $100 billion annual target by 2020.