The Indigenous World 2024: Green Climate Fund (GCF)

Written on 26 March 2024. Posted in The Green Climate Fund (GCF)

The Green Climate Fund (GCF) is the world’s largest climate fund, mandated to support developing countries achieve their Nationally Determined Contributions (NDCs) and to raise ambition towards low-emission climate-resilient pathways.^[1] The GCF was established by the UN Framework Convention on Climate Change (UNFCCC) in 2010 and has been in operation since 2015. The GCF’s main mandate is to provide support for the Paris Agreement goal of limiting average global temperature rise to 1.5°C.

In doing so, the GCF accepts financial contributions, generally termed as climate finance, from so-called developed countries also known as UNFCCC Annex-1 Countries, as well as from public, non-public and alternative sources.^[2] 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 four Active Observers (AOs) able to participate in Board sessions – two representatives from accredited civil society organizations (CSOs) from Annex-1 Countries and Non-Annex Countries respectively, as well as two from accredited private sector organizations (PSOs) also representing Annex-1 Countries and Non-Annex Countries. These observers’ term is two years with a maximum of two consecutive terms.

The GCF is yet to recognize Indigenous Peoples as a distinct constituency of Observers despite this being an established UNFCCC practice. Nonetheless, 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 GCF Observer 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 an Indigenous Peoples Advocacy Team (IPAT).

In terms of financial authority, following a rapid institutional start-up phase, the GCF’s Initial Resource Mobilization (IRM) in 2014 raised USD10.3 billion (approx. EUR 9.4 billion) in pledges. Of this, USD10.3 billion (approx. EUR 9.4 billion) were confirmed through unconditional contributions and, after accounting for variations in exchange rates, USD 10.9 billion (approx. EUR 10 billion) have been available for the commitment during the IRM period. At its 21^st Board Meeting in October 2018, the first replenishment of the GCF, called GCF-1, was launched. It raised USD 10 billion (approx. EUR 9.1 billion) equivalent in pledges, of which USD 9.9 billion (approx. EUR 9 billion) equivalent was received during the GCF-1 time period. Moving forward, the 33^rd Board Meeting held in July 2022 formally launched the second replenishment (GCF-2) process for the period 2024-2027. The first consultation meeting on the second replenishment of the fund (GCF-2) was held in December 2022 followed by another consultation meeting in April 2023.

This article is part of the 38^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 man harvesting quinoa in Sunimarka, Peru. This photo was taken by Pablo Lasansky, and is the cover of The Indigenous World 2024 where this article is featured. Find The Indigenous World 2024 in full here

Overview

As of 31 December 2023, the GCF had approved a total of 243 projects with project investment commitments amounting to USD 13.5 billion (approx. EUR 12.3 billion) (the committed amount refers to the amount allocated to projects as approved by the GCF Board). Of the total commitment, the GCF is implementingUSD 10.9 billion (approx. EUR 10 billion). Projects are under implementation once the Funded Activity Agreement (FAA) with the Accredited Entity (AE) becomes effective. The GCF has already disbursed USD 4 billion (approx. EUR 3.6 billion). The GCF estimates that these projects will help 1 billion people increase their climate resilience and will contribute to preventing the emission of 3 billion tonnes of CO₂ equivalent.^[3] In terms of project scale, micro- and small-scale projects constitute less than half of the portfolio (11% and 34%) while medium and large-scale projects account for 36% and 19%, respectively. GCF figures show that the number of large-scale projects continues to increase in the project portfolio. The large-scale project portfolio increased by 1% in just one year (from 2022-2023). The size of a project is important given that larger projects have a higher risk of having a negative impact on nature and human rights. In terms of financial instruments, the project investment amount comprises 41% grants, 40% loans, 12% equity, 4% result-based payments and 3% guarantees.^[4] The amount of loans is significant compared to other investment instruments.

Compared to 2022, the GCF’s grant investment has increased by 1% and equity investment 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 paragraph 9.4, which states that climate finance should be grants-based on the principle of Common But Differentiated Responsibilities (CBDR) with respective capabilities.^[5] Contrary to paragraph 9.4, loan investment is still significant in the GCF portfolio.

Across 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”, “ecosystem and ecosystem services”, “energy generation and access” and “forest and land use”. Indigenous Peoples across the world have bitter experiences with interventions on forest and land use, as well as with energy generation. Of the eight GCF result areas, the lowest amount of investment goes to “transport” and “building, cities, industries and appliances”. By investment theme, 54% goes towards adaptation and 46% towards mitigation in grant equivalent terms. In nominal terms, however, adaptation constitutes 44% and mitigation 56% of the portfolio. In terms of access modality, 77% of funds are accessed by international Accredited Entities (AEs), 13% by national Direct Access Entities (DAEs), and 10% by the regional DAEs.

Overall, these figures show how the GCF emphasizes project impact in quantifiable terms of tonnes 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.

Second replenishment at a glance

In continuation of the launch and consultations held in 2022, the GCF held a High-level Pledging Conference on its second replenishment (GCF-2) in October 2023. As of December 2023, GCF-2 had received USD 12.8 billion (approx. EUR 11.7 billion) in pledges for the period 2024-2027. At the outset, with increasing financial pledges and a growing project portfolio, several questions remain critical. For example, how can Indigenous Peoples directly access GCF finance themselves in order to be able to utilize such finance in a self-determined manner? From a paradigm shift perspective, how can the increasing number of GCF projects support and promote Indigenous Peoples’ contribution to climate action by recognizing the distinct relationships Indigenous Peoples have with nature, and their contribution in keeping the natural environment safe? From a country ownership point of view, how can it be ensured that GCF projects are not simply driven by governments but also owned and led by Indigenous Peoples when a project will be implemented on their territories or is going to affect matters related to Indigenous Peoples? How are the needs identified by the government and the AEs – are those needs grounded in the culture, values, worldviews and real need of Indigenous Peoples? These aspects need more attention and enlightening in the GCF as well. The GCF’s Strategic Plan 2024-2027 has picked up some of those elements. This could be a starting point of progress for the GCF to become a real vehicle for a paradigm shift.

Strategic Plan 2024-2027 from an Indigenous perspective

The GCF adopted its Strategic Plan for the period 2024-2027 at its 36^th Board Meeting in July 2023. The Strategic Plan sets out the Board’s long-term strategic vision for the GCF, as well as its objectives and portfolio targets, and operational priorities for the specific programming period. Likewise, the Strategic Plan sets out the major programming directions and operational and institutional priorities for the GCF-2 period.^[6] In May 2022, at its 32^nd Board Meeting, the Board decided to launch a consultation process to inform the review and update the Strategic Plan 2024-2027. In response to the GCF call for submissions, the Indigenous Peoples Advisory Group (IPAG) submitted its inputs by highlighting the following, among other points:

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

The Strategic Plan 2024-2027, under its long-term strategic vision, states that

...the GCF puts specific focus on supporting developing countries, and their communities and people, who are most vulnerable to the adverse effects of climate change, striving for inclusive climate action in line with its Revised Environmental and Social Policy, and integrating local communities, indigenous peoples, women and girls and people with disabilities as agents of change.^[7]

Likewise, in the section on strategic programming directions, the Strategic Plan sets the Programming Priorities for 2024-2027, wherein it:

…seeks to replicate innovative and inclusive approaches, such as incubators and accelerators for climate technologies, solutions based on local, traditional and indigenous knowledge, seed capital, and expand access to green finance, including by supporting green bonds and sukuks.

In the context of supporting paradigm shifts across sectors of mitigation and adaptation, it states it will:

…pursue collaboration with the Indigenous Peoples Advisory Group (IPAG) and with other stakeholders including local communities, women, youth, civil society and organisations for persons with disabilities to scope where there is potential for inclusive innovation based on traditional, local and [I]ndigenous knowledge and practices among other things to identify opportunities to source and aggregate pipeline of locally-led solutions.

Furthermore, in addressing urgent and immediate adaptation and resilience needs, it states it will:

…curate easy-to-access resources on climate risks, impacts and vulnerability assessments to support planning and origination: working with the World Meteorological Organisation (WMO), IPAG and global experts to draw on best available climate information and traditional, local and [I]ndigenous knowledge and practices.

Under the same section, it also mentions significantly expanding the deployment of the Enhancing Direct Access (EDA) Guidelines and other devolved financing approaches to enable more rapid access to finance for locally-led adaptation action, engaging affected communities, civil society and Indigenous Peoples in delivering to meet the needs of last-mile beneficiaries.

In the context of the private sector and promoting innovation and catalysing green financing, it mentions launching requests for proposals through which the GCF will seek to identify promising partners and project ideas for climate solution incubators and accelerators, and also accelerators of inclusive innovation based especially on traditional, local and Indigenous knowledge and practices, as well as enhancing the involvement of the private sector capable of innovation programming through the full implementation of the Project-specific Assessment Approach (PSAA). In institutional priorities for consolidating capacity for delivery, it emphasizes its policies and safeguards, wherein it mentions continuing to advance best practices on environmental and social safeguards and on matters related to Indigenous Peoples, local communities, gender, integrity, and information disclosure, to not only include “do no harm” safeguarding measures but also to improve outcomes. In the results, knowledge and learning section, it also envisages establishing more structured fora for stakeholder engagement and expert feedback, learning loops and advice, adopting participatory approaches that draw on the insights of affected communities, Indigenous Peoples, civil society, women, youth and academia.

Independent Redress Mechanism

In 2023, the Independent Redress Mechanism (IRM) followed up on complaints received concerning Project FP146 - “Bio-CLIMA: Integrated climate action to reduce deforestation and strengthen resilience in BOSAWÁS and Rio San Juan Biospheres” in Nicaragua. The project was approved in 2020 but has yet to be implemented. It aims to reduce deforestation in the UNESCO-designated Bosawás and Rio San Juan biosphere reserves in the Caribbean Region of Nicaragua. The complaint to the IRM documented repeated attacks against Indigenous Peoples, with dozens of people murdered, kidnapped or raped over the last few years and heightened concerns that implementation of the project may fuel further violence. Consequently, in a precedent-setting decision, the GCF Board suspended the project in July 2023.

Going forward

Towards the end of 2022, IWGIA, the Forest Peoples Programme (FPP), the Tebtebba Foundation (Indigenous Peoples' Centre for Policy Research and Education), the Centre for the Indigenous Peoples' Autonomy and Development (CADPI), the Nepal Federation of Indigenous Nationalities (NEFIN), and the Pastoralists Indigenous Non Governmental Organization's Forum (PINGO’s Forum), drafted and submitted comprehensive inputs to the draft GCF Environmental and Social Safeguards (ESS). Unfortunately, the ESS was not discussed by the Board in 2023 but will hopefully be so in 2024. It is crucial for Indigenous Peoples to continue monitoring GCF projects as many of these are placing increasing pressure on Indigenous Peoples’ land and resources and, paradoxically, do not address some of the root causes of the climate crisis, such as overproduction and consumption.

Consistent engagement of Indigenous Peoples in the GCF is important in order to materialize the Indigenous Peoples Policy^[8] and the GCF Strategic Plan into action. Overall, as in previous years, Indigenous Peoples’ voices and advocacy at the GCF continue to be pivotal. Keeping human rights and the rights of Indigenous Peoples at the centre of climate finance is key for the well-being, integrity and survival of Indigenous Peoples and their communities as well as keeping the Paris Agreement goal within reach.

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 the Climate Change Programme of the 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.

This article is part of the 38^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 man harvesting quinoa in Sunimarka, Peru. This photo was taken by Pablo Lasansky, and is the cover of The Indigenous World 2024 where this article is featured. Find The Indigenous World 2024 in full here

Notes and references

^[1] Green Climate Fund. “Overview. About GCF.” Accessed 3 January 2024 https://www.greenclimate.fund/about

^[2] Green Climate Fund. “Governing Instrument of the Green Climate Found.” Accessed 4 January 2024 https://www.greenclimate.fund/sites/default/files/document/governing-instrument.pdf

^[3] Green Climate Fund. “Projects and Programs.” Accessed 11 January 2024. https://www.greenclimate.fund/project/dashboard

^[4] Ibid

^[5] United Nations. Paris Agreement. 2015. https://unfccc.int/sites/default/files/english_paris_agreement.pdf

^[6] Green Climate Fund. “Strategic Plan for the Green Climate Fund 2024-2027.” Accessed 12 January 2024. https://www.greenclimate.fund/site/default/files/document/strategic-plan-gcf-2024-2027.pdf

^[7] Ibid

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

Tags: Land rights, Global governance, Climate, International Processes