The groups note in a letter that the CIFs were designed to sunset, or expire, when the Green Climate Fund is operational. They urged countries to:

adhere to the sunset clause and actively support the GCF as the primary international financial institution for climate finance. New contributions to the CIFs could create a disincentive for the early operationalization of the GCF, encourage expansion of the CIFs, and prolong their operation.

In order to allow the GCF to take on board lessons learned from the CIFs experience, the letter sent today called for a fully independent review of the track record of the CIFs – one not conducted by any entity associated with the World Bank or other multilateral development banks. The review is needed to measure the CIFs’ performance in key areas, including country and local community ownership; sustainable development, social and environmental impacts; implementation and scale-up of long-lasting mitigation and adaptation activities; private sector leverage and public risk; and transparency and accountability.

Civil society groups are urging governments to back the Green Climate Fund because it offers an opportunity to better meet the needs of developing countries and the climate crisis. The World Bank’s continued high levels of fossil fuel financing, troubling human rights and environmental records, and lack of democratic credentials have driven worldwide resistance to its attempted power grab over climate financing. Many negotiators from developing countries and activists across the globe pushed instead for a dedicated climate fund under the UN Climate Convention that would put the adaptation and mitigation needs of people in developing countries first – an institution based on sound environmental integrity, socioeconomic justice, and efficacy. Though certainly not an easy task, the opportunity to shape the GCF to meet these goals has arrived. The first board meeting of the Green Climate Fund is expected to take place at the end of May.

The release of the letter coincided with a panel discussion in Washington, D.C. entitled, “The Climate Investment Funds 4 years later: Learning lessons for the Green Climate Fund.” Friends of the Earth US presented on the state of play of the GCF, while colleagues from the Institute for Climate and Sustainable Cities, Aksi – for gender, social and ecological justice, and Gender Action presented case studies on experiences with the CIFs in the Philippines (Clean Technology Fund and the Asian Development Bank) and Indonesia (Forest Investment Program) and on the gender impacts of the Pilot Program on Climate Resilience.  Particular concerns raised about the CIFs included a lack of country ownership, flawed engagement and consultation processes with stakeholders, failure to address the drivers of deforestation and forest degradation, and, in some circumstances, the insufficient inclusion of gender equity and human rights protections.

Climate change activists are sounding alarm bells over a new World Bank lending policy they fear could erode environmental protections, human rights and transparency protections abroad.

Dubbed the “Program for Results,” or P4R, the method represents the biggest change to World Bank funding in decades. It will direct about $1 billion annually to countries based on results instead of projects — funding to deliver clean water to rural households rather than a big irrigation project, for example.

Another example would be dollars in return for proven boosted school enrollment rather than to simply build schools. Bank leaders and some development experts describe the approach as groundbreaking.

But a coalition of more than 200 nonprofit organizations from around the world is calling it a disaster. The coalition argues that the new instrument eliminates or dilutes more than two dozen safeguards designed to prevent everything from forced resettlements of indigenous people to the misuse of congressionally appropriated dollars.

Climate change activists maintain that by exempting borrowers from complying with World Bank standards, the institution is setting a dangerous bar for the new Green Climate Fund.

“This is not a good direction to be going,” said Karen Orenstein, climate change policy director for Friends of the Earth.

Noting that the World Bank serves as interim trustee for the multibillion-dollar climate change fund, she said: “It’s really problematic that the same year that the Green Climate Fund is probably going to be tackling safeguards is also the same year that P4R comes on board, because it really does a lot to potentially gut the safeguards.”

New lending era includes China and Brazil

The new funding mechanism comes at a time of great change for the multilateral lending institution. Countries like China and Brazil have eclipsed the World Bank in lending — in December, Fitch Ratings announced that China’s Export-Import Bank had extended $12.5 billion more in loans to sub-Saharan Africa than to the World Bank, and Brazil’s Development Bank is ranked second in the world after China.

The two competitors often demand less oversight for their dollars than the World Bank. Meanwhile, emerging developing countries are discovering a growing clout at institutions like the World Bank as they become less dependent on outside aid dollars.

“Program for Results is part of modernizing the international financial institutions in an environment for development finance that is dramatically changing,” Joachim von Amsberg, World Bank vice president for operations, policy and country services, told a recent panel at the Center for Global Development (CGDEV).

“This old model, if it ever was valid, of rich countries giving money and advice to poor countries and believing that if poor countries just followed the path of rich countries and the advice and the money given … is long over,” he said. Meanwhile, he noted, “Our borrowers have many options” for funding, unlike decades earlier when the World Bank was the main source of aid.

Environmental activists look at those trends with suspicion, and accuse the World Bank of lowering standards many groups fought decades to enact in order to stay competitive.

They paint a picture in which World Bank funding under P4R could be given to a government for something like a forest-related program that results in forced resettlements of indigenous people — and maintain that normal disclosure and accountability standards don’t apply with the new rules of this funding mechanism.

More flexibility to borrowers

Vince McElhinny, with the nonprofit group Bank Information Center, called the World Bank’s talk of results reform “a public relations statement which is perhaps disguising that which is a more relevant concern, which is that we’re losing market share.”

With World Bank lending decreasing and no longer the sole source of global aid, he said, countries can decide that the World Bank’s safeguards are too onerous to follow. “There was a very real concern about relevance.”

But, McElhinny argued, loosening standards is a slippery slope that will ensure countries like China plod even more slowly toward their own environmental and human rights safeguards. “The bank standards, if they get diluted, which P4R does, is a welcome invitation to competitors not to go up to the highest level. The ceiling has just been lowered.”

Paul Bermingham, the World Bank’s director of operation services, said the new lending mechanism was designed with a new goal in mind: to verify real poverty-alleviating results rather than money spent on infrastructure or other projects.

Using water delivery as an example, he said that under P4R, the World Bank might agree to fund a government plan to bring 1 million poor, rural households clean water supplies, meting out money for every 1,000 households shown to be connected. Countries would deliver that money in the way they best saw fit — as opposed to the traditional World Bank method of financing a major irrigation project or dam, complete with hefty consulting contracts for which the borrowing countries must pay.

He maintained that the concerns of environmental groups are misplaced, and argued that programs funded under P4R will undergo risk assessments and be used only on projects where the environmental impacts would be minimal.

“We are not indifferent to the risks. In fact, we are very concerned about the risks,” Bermingham said. “We care about the people, the environment and the money, and we are building in and have built into the design of the operation measures to identify the risks.” Bermingham also objected to accusations that the World Bank is simply concerned with protecting its business, arguing that the new instrument was not designed to lend more money, but rather to lend smarter.

Expectations of cautious growth

“I’m not overly concerned about a race to the bottom,” said Lawrence MacDonald, vice president for communications and policy outreach at CGDEV, the prominent development assistance think tank that has long argued for aid reforms and supports the new World Bank instrument.

“I don’t think this change has been motivated by a declining demand for bank money,” MacDonald said. “I think there’s enough demand for their funds to keep them in business, and they’re trying to foster different ways to achieve results.”

And Nancy Birdsall, president of CGDEV, called the new funding mechanism long overdue. “The idea that development aid should reward development results may seem self-evident,” Birdsall wrote to lawmakers late last year. She also downplayed environmental concerns, saying the safeguards included in the plan are sufficient to prevent harm.

That didn’t allay the worries of the U.S. Treasury, or lawmakers like Sen. Patrick Leahy (D-Vt.), chairman of the Senate Appropriations subcommittee overseeing foreign assistance, or Sen. John Kerry (D-Mass.), chairman of the Foreign Relations Committee. The lawmakers demanded and won several changes in the program before it passed the World Bank board in late July, even though the United States was the only country raising concerns.

In a briefing to lawmakers last week, U.S. Treasury officials noted that the new funding mechanism will cap spending through it at 5 percent annually for the first two years — about $1 billion — and will not include “activities that are judged to be likely to have significant adverse impacts” on the environment.

“Recognizing that a delicate balance is being struck with this new instrument, we will be closely monitoring P4R implementation to ensure that it meets our expectations,” Treasury officials wrote.

MacDonald said he expects the new funding instrument to grow cautiously. “There has been insufficient attention both from the NGOs and in the bank’s response to what economists would call the counterfactual. The existing status quo is not real good,” he said. “This is an experiment, a modest one. It’s bound in a number of ways to avoid really bad outcomes, it’s only 5 percent of the lending, it’s a two-year experiment, and it’s going to be very carefully scrutinized.”

Orenstein was less sanguine. “I’m going to be surprised if they do anything controversial within the first two years, because they know there is going to be heavy scrutiny,” she said, adding, “But beyond that, who knows?”

“Paying the Polluters” is one of the principles that they want the Green Climate Fund to be based on. Their efforts to ensure that the private sector be able to access funds directly from the GCF succeeded with the Transitional Committee’s proposed design that includes a private sector facility. Attempts from developing countries during the TC process and now in the COP17 process to ensure that the role of the private sector is subject to country-defined policies and priorities are being met with intense opposition.

Despite the World Bank’s long track record of promoting and financing fossil fuel projects and other programs that exacerbate the climate crisis, developed countries succeeded in entrenching it as the “interim trustee” of the GCF. Not content with this, they want to keep the door open for the World Bank or similar institutions whose governance structures they control, to be appointed as permanent trustee and/or play critical roles in the operations of the Fund.

They have blocked efforts to ensure that the GCF design and operations be concretely in accordance with the Climate Convention with clear accountability to the Conference of Parties. This is consistent with their actions in the negotiations on emissions cuts – turning their back on Convention principles and agreements to avoid and escape from their responsibility for the climate crisis and their obligations to the peoples of developing countries and even their own citizens.

Their stance in the talks on the Green Climate Fund, the public pronouncements of developed country governments and their less public messages point to a blatant attempt at blackmail – OUR TERMS OR ELSE – NO GCF, or NO FUNDS for the GCF!

We urge developing country governments not to be cowed, not to sell us out. We laud the efforts of those who have valiantly and brilliantly fought for our rights.

The outcomes of Durban – whether in climate finance or on emissions cuts – are looking very dim. But we will continue to fight in Durban and beyond.

Jubilee South – Asia/Pacific Movement on Debt and Development and its members

Bangladesh

• Equity & Justice Working Group (EquityBd)
• Unnayan Onneshan
• VOICE
• SUPRO
• Bangladesh Krishok Federation
• Jatiyo Sramik Jote
• Community Development Library (CDL) Trust
• Nabodhara

India

• River Basin Friends, mines, minerals and People (mmP)
• National Hawker Federation
• Indian Social Action Forum
• Himalaya Niti Abhiyan
• Nadi Gati Morcha
• Adivasi Mulvasi Astitva
• Kerala Independent Fishworkers Federatiion

Indonesia

• Koalisi Anti Utang
• Solidaritas Perempuan
• Institute for Essential Service Reform
• KRUHA
• Debt Watch
• WALHI (Friends of the Earth)
• Serikat Petani Indonesia

Malaysia

• Monitoring Sustainability of Globalisation

Nepal

• Rural Reconstruction Nepal
• Human Rights Alliance
• Jagaran Nepal
• GEFONT
• All Nepal Women Association
• All Nepal Peasants Federation

Pakistan

• Pakistan Kissan Rabita Committee
• Pakistan Fisherfolk Forum

Philippines

• Freedom from Debt Coalition
• Kalayaan
• Solidarity of Filipino Workers
• Tambuyog Development Center
• Philippine Rural Reconstruction Movement
• Makabayan Pilipinas
• Koalisyong Pabahay ng Pilipina
• Sanlakas
• Philippine Movement for Climate Justice

Sri Lanka

• Centre for Environmental Justice

Regional

• ARENA
• LDC (Least Developed Country) Watch
• South Asia Alliance for Poverty Eradication
• Migrant Forum in Asia
• Asian Migrant Center
• SEAFISH for Justice

The Green Climate Fund was created to support people in developing countries – people who are the most affected by the climate crisis but are the least responsible for it.

But at the climate negotiations this week, developed countries are trying to allow multinational corporations and financiers to directly access GCF financing.

This means companies could bypass developing country governments and their national climate strategies to get to public money.

“Turning the Green Climate Fund into a Greedy Corporate Fund would be shameful, yet this is what is being attempted at the Durban climate talks,” said Meena Raman from Third World Network.

“Led by the US and the UK on behalf of Wall Street and The City, this attempt to hijack developing countries’ funding is outrageous. Communities need this money to address climate change and to finance their own development – without repeating the same mistakes that the rich countries have made,” said Karen Orenstein from Friends of the Earth US.

“The role of private investment in financing climate activities must be decided at the national and sub-national levels in line with countries’ priorities, not corporate bottom lines. The move to allow the private sector to go directly to the Green Climate Fund for money undermines the possibility of a democratic, participatory process for meeting the needs of communities struggling to fight climate change,” said Lidy Nacpil of Jubilee South Asia/Pacific Movement on Debt and Development.

Few adaptation measures in developing countries will be attractive to the private sector, as they will not generate revenue. Some key mitigation programs may also not be financially lucrative.

Groups also warned against closed door negotiations on the Green Climate Fund by South Africa, the US, and other developed countries.

“Whatever happens in Durban must be fully transparent. We are deeply concerned by reports that South Africa is informally consulting behind closed doors on the Green Climate Fund decision,” said Bobby Peek of groundwork / Friends of the Earth South Africa. “This will greatly undermine the legitimacy, and ultimately the effectiveness, of the Green Climate Fund.”

The concerns expressed in the letter come on top of the long-held rejection by many in civil society of any role for the World Bank in the Green Climate Fund.

FOR MORE INFORMATION

Meena Raman, Third World Network, Mobile: + 27 (0) 72 26 18 870 (valid only until Dec. 9)

Lidy Nacpil, Jubilee South Asia/Pacific Movement on Debt and Development, Tel: + 27 (0) 767342705 (valid only until Dec. 9)

Karen Orenstein, Friends of the Earth US: Tel: + 27 (0) 72 04 32 655 (valid only until Dec. 9)

Bobby Peek, groundWork/Friends of the Earth South Africa, Tel: +27 (0) 82 46 41 383

Murray Worthy, World Development Movement, Tel: +27 (0) 83 96 89 917

Janet Redman, Institute for Policy Studies, Tel: +27 (0) 713861216 (valid only until Dec. 9)

NOTES:

[1]

A copy of the letter is online at

http://libcloud.s3.amazonaws.com/93/b8/c/895/2/12-1-11_priv_sect_facility_GCF_lett_FINAL_w_sigs.pdf

A background briefing highlighting key considerations for the debate on the Green Climate Fund is online at:

http://libcloud.s3.amazonaws.com/93/c4/5/896/2/GCF-COP17-key-considerations.pdf

Sponsoring organizations include:

ActionAid, Campaign to Reform the World Bank, Friends of the Earth International, Global Alliance for Incinerator Alternatives, Institute for Agriculture and Trade Policy, Jubilee South – Asia/Pacific Movement on Debt and Development, Institute for Policy Studies, World Development Movement.

Environmental activists demonstrate against the World Bank outside the United Nations Climate Change conference (COP17) in Durban December 1, 2011. REUTERS/Mike Hutchings

The US and Japan joined a chorus of objections to the $100bn Green Climate Fund’s proposed design during a heated session in Durban.

Issues over the use of private sector money and controversial fundraising mechanisms such as the financial transaction tax dominated discussions.

The US and Japan has stated categorically that they do not want to hold any discussions over a single source of funding, such as the so-called Robin Hood tax on banking transactions. Instead they insist that each individual country should be allowed to raise its share of the GCF. This national approach would also appear to rule out a system of international levies on shipping or aviation progressing in Durban.

Meanwhile a diverse range of parties including Venezuela, Saudi Arabia and Egypt objected to the use of private sector money for the fund, which it is hoped will be worth $100bn per year by 2020. The current so-called fast start finance is worth $10 billion a year till 2012.

Less developed nations are also concerned that the use of private sector finance could see control and outcomes of projects farmed out to the corporations sponsoring them, rather than being in the hands of the governments on the ground.

“There’s a huge gap to close,” said Ilana Solomon, senior policy analyst with ActionAid USA. “The big question is whether discussions will continue productively or unravel.

“The good news is that despite their differences, all parties want to see progress,” said Solomon.

This statement was backed up by US negotiator Jonathan Pershing who has described the GCF as potentially “a major global institution for climate finance…if it is designed properly”.

The fate of the GCF will now be decided behind closed doors, although COP17 President Maite Mashabane sought to assure observers that this process would remain inclusive and transparent.

“We will raise the issue at the summit so that the climate migrants can get refugee status and rehabilitated in a proper way,” State Minister for Environment Dr Hasan Mahmud told a seminar at National Press Club in the capital on Tuesday.

He further said that the government would also raise the issue in the meeting of the Climate Vulnerable Forum of most climate vulnerable nations in Dhaka on November 13-14. The meeting is being held to set a common agenda for the Durban summit.

The government would go to review the Bangladesh Climate Change Strategic Action Plan (BCCSAP) after the summit, and consider a comprehensive assessment of the climate migrants, Mahmud mentioned.

According to a report of Inter-governmental Panel on Climate Change (IPCC), around 30 million people in the world will be displaced from their living places by 2050 if the sea level rises by one-metre due to an increase in global warming.

Addressing the function, NCCB official Mizanur Rahman Bijoy said the government should raise the issue of rehabilitating climate migrants in the forthcoming Bhutan climate conference and Saarc summit in the Maldives, aiming to seek solution at the regional level.

The government also should consider its land requisition and urban development planning issue, keeping the matter of internal migration in mind, he added.

Ziaul Haque Mukta of the CSRL suggested that Bangladesh needed comprehensive assessment and national action plan to rehabilitate the climatic change migrants.

The government should prepare a guideline on the internal displacement of people, he said, adding: “To initiate an assessment and action plan on climate migrants at the international level is very urgent.”

Hasan Mehedi of Humanity Watch said several thousands of people were migrated in different places of the country after cyclonic storms — Sidr and Aila – had battered the country’s coastal belts in 2007 and 2009.

No migrants are happy with their displacement and their economic condition was further degraded, he observed.

Published in Daily Sun

The Green Climate Fund which developing countries are relying on to support their actions against global warming suffered a setback when a committee designing the fund could not agree on recommendations to give to the United Nations Climate Convention.

Last week, the transition committee held its final meeting in Capetown, South Africa. A draft of the instrument of the Fund (containing its aims, governing structures and functions) prepared by the committee’s Co-Chairs was not agreed to by two members, the United States and Saudi Arabia.

Earlier, several others of the committee’s 40 members also criticized parts of the report. But they did not reject the document.

The committee’s failure to reach a consensus could deal a blow to the climate conference in Durban (South Africa) in November. It was hoped that the launching of this fund would be one of meeting’s few bright spots, if not the only one.

The Durban conference needs a success, following the disastrous 2009 Copenhagen conference and the only partial recovery in Cancun last year.

But on the main issue – actions by countries to cut or minimize emissions that cause global warming – there is a lot of disagreement.

The Kyoto Protocol, under which all developed countries (except the United States) make binding commitments to reduce their emissions, may not survive because key members like Japan and Russia have stated they do not want to continue with it.

They and the US want it replaced by a system of voluntary pledges by developed countries, while developing countries are also pressed to take on more commitments (such as pledges and strict reporting on actions taken) than previously.

This has angered the developing countries. They have pledged that the Kyoto Protocol must be saved and not buried at Durban. But few are optimistic.

If the climate regime unravels, the consolation could be the operationalising of the Green Climate Fund, established last year in Cancun. The transition committee was tasked with recommending the objectives, governing structures, working methods, sources and uses of the funds.

The Conventions’ conference of parties was expected to endorse the report, and the fund could get down to business early next year.

It was thus a great disappointment that after four meetings the committee could not reach an agreement on the fund’s design.

The committee’s Co-Chair Trevor Manuel, South Africa’s economics minister, presented a draft report towards the end of the three-day meeting on 18 October.

The developing countries were generally happy with some points in the draft, especially that the Fund would have its own legal personality and an independent Secretariat. For them, the rationale for a new Fund is that it would be able to operate on its own, and not borrow the legal personality or its Secretariat from other organizations such as the Global Environment Facility and the World Bank.

There were also many points that developing countries such as Egypt, China, India, China and the Philippines disagreed with, including:

- The report did not state how voting would be done if the Fund’s Board is unable to have a consensus, leaving it to the Board itself to decide. An earlier draft stating that voting would require a majority vote had been replaced. Some developed countries had proposed that votes be weighted by the amount of funds contributed by countries, a principle that is strongly opposed by developing countries.

- The report gave too little authority to the Fund’s general membership, its Conference of Parties, in which developing counties have a large majority, and too much to the Board, in which the developed countries will tend to dominate (although there are to be 12 members each from developed and developing countries).

- A special facility is created to finance the private sector, including at international level. This may divert funds away from developing counties towards developed countries’ companies and financial institutions which may then have direct access both to the funds and to the developing countries (by-passing the governments). Special “access modalities” and other “necessary arrangements” for the private sector are also to be established later by the Board; this text is diluted from an earlier draft that mentioned a separate system of governance and modalities for the private sector facility, which was criticized by some as being a “fund within a fund.”

- The Fund was expected to provide mainly grants to developing countries, supplemented by concessional loans. However developed countries also want instruments such as loan guarantees for and joint equity with companies in order to “leverage” the private sector’s funds. These instruments and especially the term “leverage” were objected to by some developing countries for encouraging the Fund to engage in risky activities and for setting up a different model for the Fund. The final draft has changed the terms but the Board is still tasked with developing such instruments.

- The Fund has only windows for mitigation and adaptation initially, while many developing countries also wanted technology and capacity building windows. Developed countries (backed by some developing countries) also wanted a window for forests.

Except for Saudi Arabia, the developing countries did not explicitly object when the Co-Chair proposed that the draft be submitted by consensus to the Durban conference.

However, the US clearly objected to the Chair’s proposal. It had earlier indicated several disagreements with the draft, including that the general membership was given too many functions; that the Fund would receive funds from developed countries (it wanted developing countries to also contribute); and that the draft restricted the ability of the private sector to engage. It also questioned the section on the Fund having its own juridical personality.

Saudi Arabia also mentioned a few issues to which it wanted changes and could not accept the draft.

Eventually it was agreed that the draft would be submitted to the Conference, but not as a consensus document. The Conference can consider the report.

There is a distinct possibility that the Conference of Parties (the full membership of the Climate Convention) will “open” the report and re-negotiate the text of the Fund’s instrument.

That may not necessarily be a bad thing, since the draft can then be improved. However, if the 40 members of the committee could not agree, it would be even harder for the 190-plus members of the Convention to reach a consensus.

Since so much is at stake, there were appeals by some committee members to prolong the meeting or to hold another meeting to try to get an agreed report. However, there was no agreement for the committee to prolong its work.

They called for the creation of an independent inter ministerial board under the supervision of the prime minister with representatives from civil society groups and the affected people for the management of the climate fund.

Speaking at a national consultation meeting in the city on the eve of 17th UN Framework Convention on Climate Change they said that the prime minister’s supervision would ensure coordinated action by different ministries in it.

The board, they suggested, should comprise representatives from the ministries of forest and environment, food and disaster management, planning and agriculture.

The consultation on ‘Democratic Ownership and Social Accountability in Climate Fund Management’ was jointly organized by Equity and Justice Working Group Bangladesh, Coastal Development Partnership, IBON Foundation, The Reality of Aid and Voice at the National Press Club.

The speakers said that though the government adopted Bangladesh Climate Change Strategic Action Plan and created Bangladesh Climate Change Trust Fund and Bangladesh Climate Change Resilience Fund there were questions about the management of climate change funds in Bangladesh.

By involving the affected people and civic groups with the government in the management of the fund its utilisation would be more transparent and accountable, said ruling Awami League lawmaker Md Sohrab Ali Sana.

A member of parliamentary standing committee on forest and environment ministry, Sana said that the democratic ownership of the fund could be ensured only by facilitating the participation of the affected people and the civil society in its management.

He called for the creation of a separate ministry for coastal affairs, facing the severe adverse impact of climate change.

Action Aid Bangladesh country director Farah Kabir raised the question whether all the actions in Bangladesh were taken democratically.

Turning to developed countries she said it was regrettable that they failed in their commitment to cut down carbon emission by 2010.

She said that the developed countries did not do it when their economic condition was good and now the question was how they would do it facing economic hardship.

Moderated by EquityBd chief moderator Rezaul Karim Chowdhury, the meeting was also addressed by Jatiya Party lawmaker MA Jabbar, Oxfam country director in Bangladesh Gareth Price Jones, Bangladesh Krishak Federation general secretary Badrul Alam and Rampal upazila parishad former chairman Abdul Jalil.

The UN Framework Convention on Climate Change, popularly called COP 17, would be held in Durban, South Africa, next month.

Published in New Age Online Edition