International climate financeDirect access to Green Climate Fund will give government the liberty to spend on its priority areas
From the historic Cabinet meeting held at Kalapathar, the foothills of Mount Everest, during the Madhav Kumar Nepal’s premiership a week before the Copenhagen climate summit in 2009 to the latest speech delivered by the Deputy Prime Minister Kamal Thapa during his trip to New York last month to sign the Paris agreement, Nepali leaders have shown strong emotions in support of global climate deals and treaties.
Considering Nepal’s extreme vulnerability to the negative effects of global warming and in the spirit of offering its solidarity to the need for raising voice for the global cause, these commitments and euphoria over the years are understandably reasonable and well appreciated. However, despite the presence of our climate delegates at such international climate forums, the country still seems largely confused about what to make of these deals.
Nepal’s sluggishness to position itself as a strong and ready candidate to tap the available international finances offered to developing countries, especially through the Green Climate Fund (GCF), is a testimony to how we are among the first ones to sign deals and often among the last ones to reap the benefits. The GCF was established by 194 parties as a financing mechanism under the United Nations Framework Convention on Climate Change (UNFCCC). The purpose of the fund is to provide financial resource to developing countries to help them invest in climate mitigation and adaptation initiatives to set a path for low emission development with an aim to limit the rise of global temperature.
Developing countries around the world have been raising concerns over the availability of funds to combat the adverse effects of climate change in every climate forums and conventions. Although contentious, advanced economies have already agreed to jointly mobilise $100billion per annum by 2020 to address the pressing mitigation and adaptation needs of developing countries. As of April 2016, the GCF claims to have raised $10.2 billion equivalent in pledges from 42 states.
The GCF targets at least 50 percent of its adaptation funds to the most vulnerable countries, including Small Island Developing States (SIDS), Least Developed Countries (LDC) and African states. Nepal, where people are facing the harsh realities of climate change every passing year, with depleting water sources, aberrant rain patterns, depleting agriculture yields, increasing drought along with other climate change effects, should clearly be eligible for the fund. But one thing that is pretty clear is that the countries which learn the rules of the game and access the fund first get the advantage. Though a number of donors, including bilateral and multilateral agencies, are already supporting the Nepal government in climate change mitigation and adaptation—in renewable energy, agriculture, forestry, among others—there is a clear advantage to having direct access to the GCF fund. It will give the government the liberty to spend on its priority areas.
Going about it
The first requirement for Nepal to tap the fund is to understand how all this works. Access to the GCF resources to undertake projects and programmes would only be possible through the GCF accredited institutions. The faster the Ministry of Finance (MoF), the designated national authority for the GCF in Nepal, selects national institutions for accreditation, the sooner the country will be able to secure the GCF accreditation. And, only then can the selected institutions design and propose projects timely to bring in the GCF resources. Finding the potential national institutions for accreditation by the MoF would not be as straightforward a task as it may seem. Prospective institutions need to be capable enough to implement the projects and programmes. The MoF could draw some lessons from India, the only country in South Asia that has secured its accreditations for its institutions by the GCF, and that had conducted a public bidding for institutions interested in the GCF accreditation.
In any case, the MoF needs to be selective in choosing the public institutions with experiences and track records of handling projects and programmes in both climate mitigation and adaptation projects. Institutions with strong willingness, dedication and committed pool of expertise and track records of designing, mobilising and managing larger funds with sufficient institutional flexibility to incorporate necessary policy amendments and procedures will be more appropriate to move the accreditation process fast. Besides that, as the GCF success hinges on getting sufficient national institutions in its accreditation list and on the quality of projects it approves, there is tremendous pressure on the GCF to perform. So there is a higher possibility of cooperation and support from its accreditation panel to countries like Nepal.
The amount of $100 billion a year as climate finance commitment from advanced economies to developing countries looks neither convincing nor legally binding. In a way, it is a similar to the Shrimad Bhagbat Puran often cited by spiritual leaders in Nepal to raise funds for different charity works like building schools, temples, hospitals, often leaving the organisers with far little money than all the committed pledges by the devotees. Of course, there is a lot we could comment on about the climate politics behind these talks, deals and pledges. But the point here is, as the GCF has already started approving projects and programmes in developing countries with the available funds that it has managed to secure out of the pledged money, it is time for the government to take some practical steps to reap benefits from the opportunities to get direct access to the fund. The timing, scale and quality of the climate projects that could be implemented in Nepal through the GCF’s direct financing provision depend on how aptly the national institutions are selected for accreditation, and how soon they get to work.
Kandel is a national advisor at Alternative Energy Promotion Centre; views expressed here are personal