It is also a major milestone for the international climate regime as it further builds the momentum for international action on climate change through an ambitious legally-binding climate agreement to be adopted in Paris at the end of this year to keep global temperature increase below 1.5°C. By operationalizing and capitalizing the GCF, the international community has shown its willingness for enhanced global cooperation on fighting climate change. The significant amounts of public funding committed to the GCF will assist the adaptation and mitigation efforts of developing countries and in particular those most vulnerable countries that are already experiencing significant damages from climate change and incur real cost affecting their sustainable development prospects.
In Paris, world leaders will have to match the ambition they put into the GCF when it comes to cutting greenhouse gas emissions. Only an ambitious legally binding agreement based on science will send a strong enough signal to the private sector to embark on a massive shift of investments needed for a global economic transformation, including the decarbonisation of the energy sector by mid of this century. With the GCF and its Private Sector Facility, Parties to the climate Convention have created a vehicle that can implement this transformation but it is the Paris agreement that will be pivotal for triggering this shift.
More remains also to be done under the GCF – reaching effectiveness marks the start of a new phase in the Fund’s operations. The GCF is now set to select and fund its own projects and programmes. The Fund’s first portfolio will determine what kind of institution the GCF will turn out to be and how successful it will be in its mission to promote the needed paradigm shift.
Furthermore, there are still some countries that have not yet signed their contribution agreement with the Fund, most prominently the US, Australia and Canada. France also only signed for half of its pledge so far. Having all countries signing full contribution agreements as soon as possible will facilitate building trust and momentum towards the Paris summit.