Q. Which of the following statements regarding ‘Green Climate Fund’ is/are correct?

  1. It is intended to assist the developing countries in adaptation and mitigation practices to counter climate change.
  2. It is founded under the aegis of UNEP, OECD, Asian Development Bank and World Bank.

Select the correct answer using the code given below.

  • 1 only
  • 2 only
  • Both 1 and 2
  • Neither 1 nor 2

Answer: (a) 1 only

Green Climate Fund
  • The Green Climate Fund was established in 2010 as a part of the UNFCCC’s financial framework to channel funds from richer nations to developing countries in order to help them reduce climate change and adapt to its effects.
  • It was formed to help disadvantaged societies adapt to the unavoidable effects of climate change by limiting or reducing greenhouse gas emissions.
  • At the end of 2011, the UN Framework Convention UNFCCC accepted the Green Climate Fund as a financial mechanism in CoP 16.
  • The GCF sponsors programmes that enable and promote adaptation, remediation (including REDD+), technological development and shift (including CSS), capacity development, and national data analysis.
  • Objectives
    • It would help in the achievement of the objective of the United Nations Framework Convention on Climate Change (UNFCCC).
    • GCF will be guided by the principles of provision of the convection.
    • It would help in channeling new, adequate, additional, and predictable financial resources to developing countries.
    • It would promote and strengthen the engagement at the country level
    • The fund will also promote the social, environmental, economic, and development co-benefits.
Global Climate Financing: Scenario
  • Green Climate Fund (GCF): It was established to limit or reduce greenhouse gas (GHG) emissions in developing countries and to help vulnerable societies adapt to the unavoidable impacts of climate change.
  • Adaptation Fund (AF): It was established under the Kyoto Protocol in 2001 and has committed US$ 532 million to climate adaptation and resilience activities.
  • Global Environment Fund (GEF): It has served as an operating entity of the financial mechanism since the Convention came into force in 1994.
    • It is a private equity fund focused on seeking long term financial returns by investments in clean energy under climate change.
  • Other Funds: In addition to providing guidance to the GEF and the GCF, parties have established two special funds:
    • The Special Climate Change Fund (SCCF) and the Least Developed Countries Fund (LDCF).
      • Both funds are managed by the GEF.
    • At the Paris Climate Change Conference in 2015, the Parties agreed that the operating entities of the financial mechanisms – GCD, GEF, SCCF and the LDCF, shall serve the Paris Agreement.
Climate Financing and India: Scenario
  • Intended Nationally Determined Contributions (INDCs) are nationally binding targets adopted under UNFCCC. India has to reduce GHG emissions under this, which requires climate financing.
  • National Clean Energy Fund:
    • The Fund was created to promote clean energy, funded through an initial carbon tax on use of coal by industries.
    • Governed by an Inter-Ministerial Group with the Finance Secretary as the Chairman.
    • Its mandate is to fund research and development of innovative clean energy technology in the fossil and non fossil fuel based sectors.
  • National Adaptation Fund for Climate Change (NAFCC):
    • It was established in 2015 to meet the cost of adaptation to climate change for the State and Union Territories of India that are particularly vulnerable to the adverse effects of climate change
  • Clean Development Mechanism (CDM):
    • It allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of CO2.
    • The CDM is the main source of income for the UNFCCC Adaptation Fund.
    • The Adaptation Fund is financed by a 2% levy on CERs issued by the CDM.
  • Internal Programmes:
    • Compensatory Afforestation Fund Management and Planning Authority (CAMPA), Disaster Management Fund etc.
    • A Climate Change Finance Unit was set up by Department of Economics in the Ministry of Finance to advise and guide the MoEF&CC as well as to lead on global climate finance issues.