🔎 What’s going on?
27 countries have agreed to pledge $9.8 billion (£7.6bn) for the Green Climate Fund (GCF) over the next four years.
😮 That’s a lot, what does this mean?
Yup, this pledge is higher than the initial amount pledged in 2015 - $10.3 billion. However, the US then pulled out of the Paris Agreement and with it the funds they pledged. This brought down the initial pledge to $8.3 billion. This is why this second round is special because other donor countries - namely the UK, France, Germany, Japan and Sweden* have stepped up to the plate by significantly increasing their pledge.
💸 Ok, but where does all the money go?
GCF was established in 2010 by the UNFCCC to direct climate finances to developing countries, investing in mitigation (efforts to reduce or prevent emissions) and adaptation (measures to adjust to changes occurring due to higher emissions) activities. The fund plays an essential role in translating the 2015 Paris Agreement goals into actual actions. For example, it’s helping scale up renewable energy in countries like Kenya, Mongolia and Rwanda.
❓ Why should I care?
Multiple reports have been released this year estimating the cost of climate change - ranging from $1.8 trillion to $100 trillion if we wait 10 years to take action. In light of these numbers, the $9.8 billion is a drop in the ocean. The effects of Climate change will be felt by everyone, but the impacts will be unequally distributed - for example, those in developing countries will have to recover from stronger hurricanes, flood or drought with already thin resources.
🚦 Where do we need to be?
$100 billion by 2020. Hitting less than 20% of the goal in 2019 is mildly scary and worrying at the same time. However, with the multiplier effect in place, we can relax a little - for every $1 billion that's invested in the fund, it unlocks another $3 billion from the countries receiving the finance and from the private sector.
👤 What can I do about it?
If you are a financial professional, help unlock private finance and ensure it flows into the GCF pot.
*These countries are the top contributors. Full list of countries can be found in this link.