Nearly half of the four-day meeting, held in Songdo, South Korea from 1–4 July, was spent debating the agenda. Developing country board members did not nominate a replacement co-chair when Paul Oquist of Nicaragua could not attend, and the meeting was capped by the abrupt departure of Fund CEO, Howard Bamsey.
In the weeks since, debates have swirled about what happened to cause this precipitous decline and what paths might be taken to avoid similar missteps in the future. Much ink has been spilled on these topics – see here, here, here and here.
But looking for a moment beyond the internal politics of the Green Climate Fund (GCF), how can we ensure the long-term success of the climate finance regime, particularly in a context where multiple interdependent players struggle to coordinate their efforts, or sometimes fail to function at all?
Enhancing collaboration, seizing opportunities
On the heels of the GCF meeting, the Standing Committee on Finance of the United Nations Framework Convention on Climate Change (UNFCCC) held its Sixth Annual Forum. As an advisory committee to the UNFCCC Conference of Parties, the raison d’être of the committee is to “[improve] coherence and coordination in the delivery of climate change financing”. Specifically, this year’s forum sought to understand how the climate finance architecture could improve cooperation between climate funds.
This is no small question and opinions differ among experts on how best to achieve this goal. Still, at least three key points of agreement emerged during the two-day workshop, all of which are crucial as the climate finance landscape evolves.
Point 1: There is room to develop clearer roles and responsibilities for each climate fund
Fundamental to complementarity and coherence in climate financing is the recognition that climate funds are separate entities with diverse mandates. Today, there are over 60 institutions that raise, manage, and/or disburse climate finance, each of which plays a distinct role in this complex landscape.
On the one hand, this diversity promotes broader coverage of finance needs: there are more partners available with whom recipient countries can work, including some that may have expertise specialised for their needs. (While this is broadly positive, it could pose problems for governments with low capacity that may not have the resources to liaise with multiple funds.)
On the other hand, this crowded field raises the risk of duplicating efforts: with so many actors operating it can be difficult to understand who is working on what and to assure finance provision is indeed comprehensive and reaching the most vulnerable. There is growing agreement that space exists to develop clearer roles, mandates, and niches for the various climate funds to facilitate coherence and complementarity.
Point 2: Complementarity must involve different approaches for different contexts
In line with the recognition that different funds may have different roles, there is also a need to ensure that different approaches are available for diverse contexts around the globe. There has been significant interest over the past several years in catalyzing private sector investment for climate purposes. While the private sector is undoubtedly important, courting it should not come at the expense of country ownership, for example. A diversity of approaches is needed, either between funds, or within the same fund, so that financing packages can be created that suit the needs of the recipient country and sector. In addition to galvanising private sector funds, attention should also be paid to enhancing direct access and long-term capacity building.
Point 3: The UNFCCC has a role to play in coordination
In the face of substantial challenges around coordination and coherence, it is evident that there is a need for a coordinator. The UNFCCC, particularly its Standing Committee on Finance, is well-placed to provide strategic advice to help the climate finance regime function more effectively and make best use of the diversity of available expertise. While the committee does not have the mandate to directly instruct many of the relevant funds, its technical capacity and political clout make it an excellent candidate to commission needed work, convene conversations between stakeholders, and encourage actors to think critically about how to best use their positions in this complex institutional landscape to effect positive change. In particular, the SCF could facilitate efforts to make data more easily available and accessible and streamline accreditation processes across funds.
In whose interest is climate finance discord?
In view of these points, it seems self-evident that coordination in the climate finance landscape is worthwhile. Yet there might be reason to be wary of pursuing coordination as an end in itself. As with much of international policy, the climate finance arena is susceptible to broader geopolitical factors and structural forces that may reinforce inequality. So, it is important to ask: in whose interest is the current discord in the climate finance landscape, and does coordination help to resolve these more basic issues? Or, put differently, is the coherence of climate finance a genuine coordination problem, or are there more complex factors at play?
To take a parallel case, a recent article by Ciplet et al. (2018) addresses the role of transparency in the climate finance regime. As with coordination, enhancing the transparency of climate finance is broadly viewed as a positive end in its own right, impeded only by the complex and bureaucratic nature of the landscape. The authors refer to this perspective as the “institutionalist” view, which contends that while we would prefer to be more transparent, limited capacity stands in the way.
This is contrasted with the “structuralist” approach, which posits that the lack of transparency in the climate finance space is the product of inequality: powerful actors prefer calls for transparency over stricter regulatory measures, and therefore embrace the adoption of norms around transparency, but fail to comply.
While this perspective acknowledges the role played by inequality and power, it fails to take seriously the agency of marginalised actors, who can push for potentially transformative reforms. Instead, the authors argue that transparency can be viewed as contested political terrain where actors and coalitions battle over the conditions of inequality.
There are strong parallels between coordination and transparency in climate finance. It is crucial to understand the role that inequality and social structure play in the current lack of coordination and coherence, while also accounting for the agency of marginalised actors and the role of policy reforms. To approach coordination only as a benign end in itself is to miss core questions about how improved coherence between multilateral climate funds can generate transformative change.
Overall, it is important to keep our collective eye on the ball. The central aim of climate finance is to both reduce emissions and facilitate the transition to climate resilient development pathways, particularly for the most vulnerable among us. As the world continues to warm, keeping these aspirations at the forefront of our climate finance discussions will help to ensure that our efforts are impactful, and that funding benefits the communities who need it most.