http://www.environmental-finance.com/news/view/1979
The UN hailed "solid progress" in the design of its Green Climate Fund (GCF), following its third meeting this week, at which one private sector observer reported "more common ground than not" among design committee members.
The GCF, first proposed in the 2009 Copenhagen Accord, is intended to channel hundreds of billions of dollars to developing countries to help them mitigate greenhouse gas emissions and adapt to climate change.
The UN's Framework Convention on Climate Change (UNFCCC) secretariat reported that a meeting of the fund's Transitional Committee in Geneva from Sunday to Tuesday delivered "advances on the nuts and bolts of how the Green Climate Fund will function" including "a broad agreement on the importance of private sector engagement".
A UN spokeswoman was unable to provide further details.
However, Steven Gray, London-based head of international and UN policy at asset manager Climate Change Capital, who attended the meeting, said that there was an acknowledgement that "private sector engagement is about more than just consultation".
One of the tensions between developing and industrialised countries over the GCF is from where the $100 billion/year by 2020 promised to poorer countries in Copenhagen will come. Developing countries, by and large, expect money to come from government coffers - while most industrialised countries expect the private sector to stump up much of the cash.
Gray said that while the "usual suspects" - European and US committee members - were "very explicit" in stressing the importance of leveraging private sector investment, "developing countries weren't opposing it".
He said their concerns were more that their domestic private sectors would be able to tap into the financial flows promised via the GCF. "I was encouraged," he added, describing the talks as being carried out in "a good environment, and with more common ground than not".
"Clearly, there is ambition on the part of governments to create a fund that will reach a scale that is sufficient to put the economic development of their countries onto a low-carbon and climate-resilient path," said Christiana Figueres, executive secretary of the UNFCCC.
"Governments also want the fund to be country-driven and integrated into national development planning processes. And they are keen for Green Climate Fund resources to be long-term to allow for the economic transformation necessary to address climate change," she added.
"The Transitional Committee of the fund is now fully on track to conclude the design of the fund for the approval by UNFCCC's Conference of the Parties [COP] in Durban [at the end of the year]," she said.
Some of the key issues that the committee is wrangling with include the fund's legal structure, its relationship with and independence from the COP, which ultimately oversees the UNFCCC, and the role of the private sector.
Some observers have raised doubts over whether the GCF can be successful in raising the scale of finance required, and have pointed to the relative failure of the World Bank-run Global Environmental Facility in mobilising capital, partly due to its legal structure.
However, substantial climate funding for developing countries is seen as a vital component of any international climate agreement.
