LONDON, Aug 20 (Reuters Point Carbon) - Board members of the U.N’s Green Climate Fund (GCF) must rise above politics when they meet for the first time later this week to help channel $100 billion a year towards the world’s poorest nations to fight the catastrophic effects of rising temperatures, and to act as a springboard to a global climate deal in 2015.
After a five-month delay board members of the U.N.’s GCF will finally take their seats on August 23 to begin thrashing out details on how the fund will operate, where it will be located and how it will dole out cash.
“The role of the fund is extremely important. It has to show the world it is looking beyond the political bickerings of the UNFCCC,” said Farrukh Khan, an alternate member of the board representing Pakistan.
U.N. climate negotiations have for years been marred by a lack of trust, with rich and poor countries trading accusations over broken promises while global greenhouse gas emissions rise.
The creation of the fund was hailed as one success to come out of U.N. climate talks in Cancun in 2010, but disagreements among regional groups of countries about who should sit on its governing panel three times delayed the first board meeting this year.
“We need to build confidence in developed, developing countries and the private sector to show that the Fund is in good hands,” Khan said.
At last year’s high level climate talks in Durban negotiators agreed to work towards an international pact to cut emissions in both developed and developing countries to be formalized by 2015 and to start no later than 2020.
But progress was limited at an interim meeting in Bonn, Germany in May, with several developing countries accused by richer states of blocking the negotiations and others demanding more cash pledges before they agree to speed work on issues such as designing new types of carbon markets.
A well functioning fund operating by 2014 could help grease the wheels of the global deal, said Abyd Karmali, global head of carbon markets at Bank of America Merrill Lynch, who is a private sector observer at this week’s meeting.
“It will be important for there to be significant progress with the fund by then (2014) so it does not become a reason not to have an agreement by 2015,” he said.
Rich nations have pledged to give $30 billion to help developing countries tackle climate change over 2010-2012, but last year’s U.N. climate talks failed to make solid progress on sources of finance for the GCF beyond this year, while the global economic crisis has left countries reluctant to commit new cash.
“We are massively concerned about the (funding) gap,” said Meera Ghani, senior policy officer for climate finance at green coalition CAN Europe.
“We as NGOs are asking for rich countries to pledge at least $10-15 billion in new and additional public finance from now until 2015 as part of the overall 2013-15 finance package. If countries don’t put any money in there won’t be anything to disperse.”
Pakistan’s Khan said direct sources of funding are unlikely to be discussed in detail at this week’s meeting.
“It is not up to the board to decide where the sums for the fund will come from. The job of the board is to create the tools that can be used to galvanize it,” he said.
The board will establish rules for who will distribute the cash, and how closely the spending will be monitored.
One of the key issues for the first meeting will be to select the fund’s host country.
“The six candidates have been known for some time; our expectation is that the board may well be in a position to decide on this next week,” Karmali said.
Germany, Mexico, Namibia, Poland, South Korea and Switzerland have all made official requests to host the fund.
It is also expected that whichever country plays host to the fund will become one of its first contributors of cash.
“We were hoping countries would have made their pledges before the host country is decided as an argument to support their bid, but so far this has not happened with the exception of some seed money from Germany,” Ghani said.
The board, made up of 48 members and alternates from across the globe will have one further meeting before this year’s climate talks in Qatar, which is likely to take place in South Korea.