The GCF: Catalyst for Adaptation or Business as Usual?

Everyone has questions about the Green Climate Fund. For some, it has been presented as the financial cure-all for developing countries and those most vulnerable to climate change. For others, it is just one more bureaucratic trust fund that will put international and donor interests first and developing country interests a distant second. What is interesting about the GCF is that it has received far more attention than any other development trust fund ever has, and is quite polarizing. Politics as usual, but for Pacific island governments and citizens, it is important to have a good understanding of what to expect from the Fund.

What differentiates the GCF from other climate change trust funds such as the Global Environment Facility is that it specifically reserves 50% of its funding for least developed countries (LDCs), small island states (SIDS) and Africa. It also ensures equal funding for adaptation and mitigation. The GCF was launched in 2015 to much fanfare and great expectations that the most vulnerable would be prioritized.

There are two ways for Pacific islands to access the Fund. First is through ‘Direct Access’ which means governments can submit proposals directly to the Fund for review, approval and financing. While this option provides relief from the normal process of trust fund financing (accessing funds through multilateral organizations), it is extremely bureaucratic, laborious and beyond the capacities of most Pacific island governments. Why? The Guardian provides a clear overview of the challenges. In order for a country to directly access GCF funds, as opposed to going through international organizations or NGOs, it needs to nominate a ‘National Designated Authority’ which then nominates an implementing institution for accreditation. Institutions, such as ministries or national development agencies, have to be accredited by the GCF before they can apply for funding. The process is cumbersome: a 52 page application form in which the institution must prove that they have a track record of delivering mitigation and adaptation projects, have a fully functional independent audit committee with plans for the last three years, various procurement committees with relevant guidelines and data on complaints handled in the past two years, and examples of conflicts of interest and how they were handled. It is a huge challenge, not to mention unreasonable, for small countries which simply do not have extensive mechanisms and procedures. There is also a lack of clarity on just what policies and procedures need to be followed. In the case of the GCF, countries should follow their own policies and procedures, but those procedures do need to demonstrate compliance with basic international gender and fiduciary standards. It’s a significant amount of work to get institutions and systems up to speed, and the GCF has a ‘Readiness Programme’ which provides funds to support capacity building for countries where it is needed. Of course, building capacity and filling gaps delays the accreditation process, which is technically only six months long but has been known to stretch to two years due to backlogs and red tape. Since the GCF became operational on 2015, only 20 agencies have been accredited, and 75% of those are regional, international and UN agencies. It does not bode well for countries seeking to access funds as soon as possible. It’s not like sea-level rise works on funding time frames.

There is one other option. Countries can apply through the multilateral institutions that have already been accredited (the ‘business-as-usual’ approach). In the Pacific, this includes UNDP and SPREP, among others. However, the business-as-usual approach has already sparked controversy and dissent in the Pacific. Kiribati has complained that countries are ‘held ransom’ to the desires and priorities of other agencies. There is also the issue of these agencies working top-down rather than bottom-up (such as UNDP, which puts emphasis on increasing resilience through national agencies rather than local government and communities. Read more here). Another issue is multi-lateral agencies don’t prioritize channeling funding for CCA to the local level, despite a clearly stated need for such in the Paris Agreement, and, incidentally, the GCF. Because the ‘Direct Access’ approach takes longer, countries feel compelled to apply through a multilateral agency where country priorities compete with agency priorities. It is expedient but not necessarily impactful.

Where does this leave Pacific island countries? First, governments need to prioritize accessing the GCF Readiness Programme in order to improve capacities to ensure that they can accredit national institutions and receive direct access finance in the medium- to long-term. Second, for short-term needs, Pacific islands will have to work closely with multilateral agencies, but instead of resigning ourselves to the business-as-usual option which sees priorities in competition, Pacific islands states need to continue the leadership shown during COP21 in December 2015 to change the balance in the relationship with these agencies.

Why not try this approach? External agencies such as UNDP, SPREP and the Asian Development Bank are accredited and WANT to spend money. They can only do that with government cooperation. Currently, the feeling is that these agencies hold the upper hand and so governments feel like they are being held ‘hostage’ to broader agency priorities and preferences. It harks back to the discussion (link, above) on indifference and silence being considered consent. Flip this view on its head. Don’t be indifferent and silent on the issue because you feel that it’s the only way to get money. Pacific island countries need to combine forces to make sure Pacific priorities are heard and accommodated. Agencies like UNDP and ADB don’t exist for the sake of existing - they were set up to respond to developing country needs. Hold them to account. Force them to do your bidding and use funding from the GCF to address your climate adaptation priorities - and with national governments in the driver’s seat. Banding together creates a louder voice to bring to the attention of the GCF that funding accessed through multilateral agencies must respond to stated government priorities and not just partnership agreements that governments have with these agencies, such as the UNDAF with UNDP. The LDC group in the UNFCCC is one platform, the SIDS group in the UN General Assembly is another in which to make concerns about feeling ‘held hostage’ known. The first step to changing the balance in donor-government relationships is to discuss it constructively and raise awareness of the issue on the global stage. Awareness leads to change… something that the Pacific islands know well from their COP21 success.