Building resilience
to climate change
Moving towards
low carbon societies
Reducing Emissions
from Deforestation
and forest Degradation
New finance models
for the green economy

Funding The Future

Federal Minister for the Environment, Nature Conservation and Nuclear Safety, Germany

While the concept of climate change was repeatedly and publicly challenged just a few years ago, sceptics now find themselves on shakier ground. The continuing rise in global temperature, the increased frequency of extreme weather events and the dangers they pose to people, the accelerated extinction of species – these and other impacts provide sombre confirmation that global warming is happening with devastating consequences. The governments of developed countries are aware that such impacts can only be tackled by cooperation. Developing countries – which now demonstrate the largest rise in emission rates – must avoid the mistakes commonly made by the developed during industrialization, and should establish low-carbon economies from the very outset. In this context climate finance will play a key role in international climate negotiations.

Developed countries pledged extensive funding for climate measures in developing and industrializing ones - amounting to US $ dollars 100 billion a year from 2020 – at the 2009 Conference of the Parties (COP ) of the UN Framework Convention on Climate Change in Copenhagen. In the meantime Germany will provide 1.26 billion euros in fast start finance for mitigation, adaptation and REDD+ from 2010 to 2012. The Green Climate Fund (GCF) began its work this year, following the 2011 COP in Durban: its main task is to promote and structure the paradigm shift in developing countries towards low-emission economies. As a member of its Board, Germany actively supports the GCF and is doing everything in its power to ensure that it can operate effectively as soon as possible.

Several things are needed to initiate a genuine paradigm shift in recipient countries and thus fight climate change successfully capacity building in institutions to ensure a systematic and efficient use of funds; direct access to GCF financing; and private sector participation in mobilizing and deploying resources. In most countries the necessary institutions and structures, do not yet exist or are inadequate, as is experience in deploying the funds. Many countries have not yet nominated their National Implementing Entity for accreditation by the GCF. Comprehensive preparatory measures are needed to ensure that recipient countries gain direct access to funding, and to bring the private sector on board. The aim is to support these countries and their institutions in obtaining and managing financial resources from the GCF, optimizing their use, and establishing appropriate monitoring systems. There must also be constructive cooperation and efficient decision-making among national and international players: government, business and civil society. Professional knowledge management is also needed to derive useful lessons from this complex process.

Germany pledged 40 million euros in Durban for readiness activities to help operationalize the Fund. Half this sum will be allocated by the Federal Ministry for the Environment and Nature Conservation, and half by the Federal Ministry for Economic Cooperation and Development, in accordance with recipient countries' needs. The implementing organizations are UNEP, UNDP, Deutsche Gesellschaft für Internationale Zusammenarbeit, the KfW banking group, and the World Resources Institute and there are four key tasks:

  1. Direct Access: institutional support and monitoring during the accreditation process of the National Implementing Entity nominated by developing country government.
  2. Strategic planning assistance: support in developing national strategies for mitigation and adaptation measures, closely tied to sectoral and cross-sectoral policy approaches.
  3. Development of project pipelines: establishing national GCF project pipelines including advisory services and capacity building in key sectors, with a special focus on involving the private sector.
  4. Global experience exchange: knowledge management on GCF readiness,including an exchange of experience in methodology and best practice examples.

The UN will play an important and responsible part in implementation: in January 2013 the GCF Investment Readiness Program, run jointly by UNEP and UNDP, will be launched in selected developing and industrializing countries, focussing on analysis, education, and building capacities in the National Implementing Entities. The primary goal is to give recipient countries direct access to the funds. Another aim is to support developing countries in setting up national investment programs and strategies for mitigation and adaptation. All experience and results must be communicated clearly. It can thus provide guidance for the future work of the Fund and highlight successful programmes and measures.

Germany would like its commitment to inspire others to provide urgently needed support for effective climate action in developing countries and draw attention to the vital role of the Green Climate Fund. Our fight against climate change can only succeed if we work together. So, alongside the task of facilitating and introducing suitable and effective climate measures, future goals will be to convince more donor countries to join the initiative and to intensify international cooperation, maximizing global commitment to climate action.

In the medium term, we must also address international transparency in the field of climate finance. There are now over 60 different international climate funds, and many recipient countries have long lost track of information about their financing conditions. Meanwhile, donor countries need a clearer overview of the climate projects already being implemented by different ministries and organizations in the recipient countries, so as to prevent overlapping projects and make the best use of synergies. A key task for the future will therefore be to compare donor country activities with the demand and ongoing projects in recipient nations. All this shows how important it is for the Green Climate Fund to begin its work without delay. Germany, for its part, will give any support it can.