The Indigenous World 2023: The Green Climate Fund (GCF)

Written on 30 March 2023. Posted in The Green Climate Fund (GCF)

The United Nations Framework Convention on Climate Change (UNFCCC) established the Green Climate Fund (GCF) to assist so-called developing countries in climate adaptation and mitigation actions. The GCF aims to catalyse a flow of climate finance to invest in low-emission and climate-resilient development pathways in support of the Paris Agreement goal of keeping average global temperature rise to 1.5 °C.^[1]

In doing so, the GCF accepts contributions generally termed as climate finance from so-called developed countries, as well as from public, non-public and alternative sources.^[2] Following a rapid institutional start-up phase — the GCF was established in 2010 and has been in operation since 2015 — the GCF Initial Resource Mobilization (IRM) in 2014 raised USD 10.3 billion in pledges. Of this, USD 8.3 billion were confirmed through unconditional contributions and, after accounting for variation in exchanges rate, USD 7.2 billion have been available for the commitment during the IRM period.

Moving forward, at its 21^st Board Meeting in October 2018, the first replenishment of the GCF (GCF-1) was launched and the 33^rd Board Meeting held in July 2022 launched the second replenishment (GCF-2). According to the GCF statement, GCF-2 will further strengthen the Fund’s ability to urgently respond to the climate crisis and empower climate action in developing countries for the 2024 – 2027 period. The Board decision also states that the replenishment process consists of a series of consultations that will culminate in a pledging conference in 2023. As of November 2022, the GCF had raised USD 10 billion equivalent in pledges, of which USD 9.9 billion equivalent was received.^[3]

For key decision-making, the GCF has a Board of 12 members from UNFCCC Annex-1 Countries and another 12 from Non-Annex Countries. It also has two Active Observers (AOs) representing civil society, one of whom is from Annex-1 Countries and the other from Non-Annex Countries, as well as two AOs representing private sector organizations.

Unlike the UNFCCC and other UN mechanisms, the GCF does not recognize Indigenous Peoples as a distinct constituency. Nevertheless, the GCF has an Indigenous Peoples Advisory Group (IPAG) that was operationalized in 2022, and a stand-alone Indigenous Peoples Policy.

The AOs from civil society represent the Network of Civil Society Organizations, Indigenous Peoples and Local Communities (CSO Network), a coalition of non-profit observer organizations and Indigenous Peoples’ organizations. Besides engaging in the CSO network, Indigenous Peoples and their allies are organized in the Indigenous Peoples Advocacy Team (IPAT).

This article is part of the 37^th edition of The Indigenous World, a yearly overview produced by IWGIA that serves to document and report on the developments Indigenous Peoples have experienced. The photo above is of an Indigenous person in Tanzania. This photo was taken by Geneviève Rose, and is the cover of the Indigenous World 2023 where this article is featured. Find the Indigenous World 2023 in full here.

Overview

As of 31 December 2022, the GCF had funded a total of 209 projects with project investment commitments amounting to USD 11.4 billion. Of the total commitment, the GCF is implementing USD 9.3 billion. It is estimated that these projects will help 666 million people increase their climate resilience and will contribute to preventing the emission of 2.4 billion tons of CO₂ equivalent.^[4] Micro- and small-scale projects constitute less than half (11% and 33%) of the portfolio whereas medium and large-scale projects account for 36% and 18%, respectively. GCF figures show that the number of large-scale projects are continuing to increase in the project portfolio. The size of a project is important given that larger projects have a higher risk of negative impact on nature and peoples.

In terms of financial instruments, the project investment amount comprises 43% loans, 41% grants, 9% equity, 4% result-based payments and 3% guarantees.^[5] The amount of loans is higher among other investment instruments. Compared to 2021, the GCF’s grant investment has decreased by 1% and equity increased by 3% in the project portfolio. These figures raise the question of whether or not climate finance is flowing in accordance with Article 9 of the Paris Agreement, particularly Article 9.4, which states that climate finance should be grants-based on the principle of Common But Differentiated Responsibilities (CBDR). Contrary to Article 9.4, loan investment is increasing in the GCF portfolio.^[6]

In terms of result areas, a significant amount is being invested in “livelihood of people and communities” – although there is no data available on how this has included Indigenous Peoples climate-friendly lifeways – followed by “health, food and water security” and “ecosystem and ecosystem services”. Of the eight GCF result areas, the lowest amount of investment goes to “transport” and “building, cities, industries and appliances”. In terms of investment theme, 49% goes towards adaptation and 51% towards mitigation in grant equivalent terms. In nominal terms, however, adaptation constitutes 38% and mitigation 62% of the portfolio. In terms of access modality, 76% of funds are accessed by international Accredited Entities (AEs), 13% by national Direct Access Entities (DAEs), and 11% by the regional DAEs.

Overall, these figures show how the GCF emphasizes project impact in quantifiable terms of tons of CO₂ equivalent mitigated and number of people building their resilience in general. It is, however, equally important to have data on the projects’ impact on the social, cultural, economic, ecological and overall well-being of communities and Indigenous Peoples.

Establishment of the Indigenous Peoples Advisory Group (IPAG)

The adoption of the Indigenous People Policy in 2018 was one of the most important advocacy achievements of Indigenous Peoples and their allies at the GCF.^[7] A key element of the policy is the establishment of an Indigenous Peoples Advisory Group (IPAG).^[8] In 2022, pursuant to paragraph 81 of the policy (decision B.19/11, Annex XI), the IPAG was operationalized.^[9]

The main objective of the IPAG is to enhance coordination between the GCF, accredited entities and executing entities, States and Indigenous Peoples in relation to matters concerning Indigenous Peoples. The process of establishing the IPAG took place in accordance with paragraph 82 of the Indigenous Peoples Policy. The policy notes that the IPAG would comprise four Indigenous Peoples’ representatives, one from each of the developing state regions where the GCF may fund activities. As set out in the Policy, Indigenous Peoples from each of these regions then went through a self-selection process to decide on a member to represent their region in the IPAG. The Secretariat and the IPAG then developed the terms of reference and functions of the group. The first meeting of the IPAG was held from 26-28 September 2022, in Songdo, South Korea.^[10] This process of establishing and operationalizing the IPAG within the GCF is a key milestone.

Development of Environmental and Social Safeguards (ESS)

In carrying out its mandate and ambition of promoting a paradigm shift towards low-emission and climate-resilient development pathways, the GCF acknowledges the need to manage environmental and social risks and impacts, and improve the outcomes of all GCF activities. The CSO Network and IPAT have long been calling for dedicated safeguards to improve environmental and social outcomes. The GCF has thus far used the Performance Standards of the International Finance Corporation (IFC) as interim Environmental and Social Safeguards (ESS) and a tool for the GCF and its partners to identify and minimize any potential adverse environmental and social impacts of its activities, maximize environmental and social benefits, and improve the environmental and social performance of the GCF and its activities. At the 23^rd Board Meeting, in July 2019, the Board thus decided to request that the Secretariat proceed to develop the GCF’s own ESS, and to set the approach to be taken. The development of the ESS was to happen in three stages, with stakeholder consultations undertaken at each stage, and they would retain the basic structure and thematic content of the interim ESS.

Stage 1 produced a scoping report while, in early 2022 during Stage 2, the GCF presented a proposed structure and contents for the ESS. Stage 3 presented the first full draft, for which another round of “calls for input” was issued in November. The IPAG made its submission and the IPAT also made a detailed submission endorsed by IPAG members.^[11] The submissions argued that the draft ESS relied too much on the original IFC Performance Standards and had added new language and elements without ensuring that the resulting safeguards would be sufficiently coherent and comprehensive to effectively protect Indigenous Peoples’ rights. They further argued that this left the draft ESS open to interpretation, allowing for potentially dangerous loopholes and failing to meet all the necessary international standards. Key points raised in the submissions included the lack of proper linkage and compliance with the Indigenous Peoples Policy, non-recognition of Indigenous Peoples’ positive contributions to climate action, and misinterpretation and misappropriation of the right and principle of Free, Prior and Informed Consent (FPIC), among other issues.

At a subsequent virtual consultation in December 2022, the GCF Secretariat promised to carefully consider the detailed input in its further development of the ESS. The final ESS is due to be adopted by the Board in 2023.

Consultation process for review and update of the Strategic Plan for the GCF’s second replenishment period, 2024-2027

The GCF Strategic Plan sets out the Board’s long-term strategic vision for the Fund, as well as its objectives and portfolio targets, priorities and operational priorities for the specific programming period. The initial Strategic Plan was adopted in 2016 for the IRM period (2015-2019). The Strategic Plan was then updated in 2020 for the first replenishment period (2020-2023). In May 2022, at its 32^nd Board Meeting, the Board decided to launch the consultation process to inform the review and update of the Strategic Plan for the GCF’s second replenishment period, 2024-2027.^[12] In June 2022, GCF opened a call for submissions and conducted informal consultations. In response to the call, the IPAG submitted its inputs by highlighting the following key points:

• Recognition of the different needs of Indigenous Peoples.
• The significant role of public funds as mentioned in Article 9.3 of the Paris Agreement.
• Importance of mobilizing grant-based climate finance pursuant to Paris Agreement Article 9.4.
• Effective participation of Indigenous Peoples and recognition of their knowledge in climate action as highlighted by the IPCC AR6.
• Recognition of the knowledge of Indigenous Peoples in adaptation as per Article 7.5 and support for non-carbon benefits in mitigation as stated in Article 5.2 of the Paris Agreement.
• Compliance of the Strategic Plan with relevant articles of Paris Agreement in a holistic and integrated manner.
• Direct access for Indigenous Peoples to GCF finance.
• Effective monitoring of safeguards implementation.
• Indigenous Peoples’ disaggregated data.
• Engagement of Indigenous Peoples in readiness activities.
• Focus on smaller, locally-led initiatives.

Going forward

Indigenous Peoples’ voices and advocacy at the GCF continue to be pivotal. Keeping human rights and the rights of Indigenous Peoples at the center of climate finance is key for the well-being, integrity and survival of Indigenous Peoples and communities as well as for meeting the goals of the Paris Agreement.

Tunga Bhadra Rai (This email address is being protected from spambots. You need JavaScript enabled to view it.) belongs to the Rai Indigenous Nation of Nepal. He is an indigenous researcher and anthropologist currently working as the Director of Climate Change Program of Nepal Federation of Indigenous Nationalities (NEFIN). He engages in advocacy at the UNFCCC, GCF, and in other national and international fora. Mr. Rai has published articles on Indigenous Peoples.

Stefan Thorsell is Climate Advisor at the International Work Group for Indigenous Affairs (IWGIA). He engages in international climate advocacy at the UNFCCC and the Green Climate Fund in collaboration with Indigenous representatives. Stefan has published on Indigenous Peoples’ rights and climate change as well as on the peace process in Colombia.

This article is part of the 37^th edition of The Indigenous World, a yearly overview produced by IWGIA that serves to document and report on the developments Indigenous Peoples have experienced. The photo above is of an Indigenous person in Tanzania. This photo was taken by Geneviève Rose, and is the cover of the Indigenous World 2023 where this article is featured. Find the Indigenous World 2023 in full here.

Notes and References

^[1] Green Climate Fund. “Overview. About GCF.” Accessed 23 December 2022, https://www.greenclimate.fund/about

^[2] Green Climate Fund. “Governing Instrument of the Green Climate Found.” December 2011, https://www.greenclimate.fund/sites/default/files/document/governing-instrument.pdf.

^[3] Green Climate Fund. Accessed 24 December 2022, https://www.greenclimate.fund/home

^[4] Ibid.

^[5] Ibid.

^[6] United Nations. Paris Agreement. 2015, https://unfccc.int/sites/default/files/english_paris_agreement.pdf

^[7] Harada, Tomohiro., Tunga Bhadra Rai., Kathrin Wessendorf., Stefan Thorsell. The Indigenous World 2019: UN Framework Convention On Climate Change.” In The Indigenous World 2019, edited by Dwayne Mamo, IWGIA, 648-649, 2019, https://iwgia.org/en/un-framework-convention-on-climate-change-unfccc/3675-iw-2019-unfccc.html

^[8] Green Climate Fund. “Indigenous Peoples Policy.” https://www.greenclimate.fund/sites/default/files/document/ip-policy.pdf.

^[9] Green Climate Fund. “Notification on the Indigenous Peoples Advisory Group of the Green Climate Fund.” 17 February 2022, https://www.greenclimate.fund/sites/default/files/document/notification-indigenous-peoples-advisory-group-green-climate-fund.pdf

^[10] “GCF hosts first Indigenous Peoples Advisory Group Meeting.” Green Climate Fund, 4 October 2022, https://www.greenclimate.fund/news/gcf-hosts-first-indigenous-peoples-advisory-group-meeting

^[11] The organizations issuing the submission include: Indigenous Peoples’ International Centre for Policy Research and Education - Tebtebba Foundation, Center for the Indigenous Peoples Autonomy and Development (CADPI), Nepal Federation of Indigenous Nationalities (NEFIN), Pastoralists Indigenous Non Governmental Organisations’ Forum (PINGO’s Forum), International Work Group for Indigenous Affairs (IWGIA) and Forest Peoples Programme.

^[12] Green Climate Fund. “Decision of the Board – thirty-second meeting of the Board, 16-19 May 2022, https://www.greenclimate.fund/sites/default/files/document/gcf-b32-15.pdf

Tags: Global governance, Climate, Human rights, IWGIA