Green Climate Fund and the Role of Private Equity in Development : Reactions and Insights Last Tuesday, June

26, Prof. Sarah Bracking of the University of Manchester held a talk at the NCPAG Case room about the issues regarding green climate funds. The talk focused on the issues regarding the funds and the role it has in ensuring development for countries affected by climate change and other environmental issues. It can be noted that a lot of insights can be drawn out through a public administration perspective. Background The speaker's discussion focused on the reality that those most at risk from climate change are the ones living in chronic poverty and vulnerable conditions. Around $125 billion of economic losses is expected due to climate change, with a prediction to rise to $600 billion by 2030. As a solution, the idea of a Green Climate Fund was founded from the COP16 meeting in Copenhagen. A fund worth $30 billion will be initially pooled by this year to meet the growing needs of countries to fulfill their financial obligations in the Copenhagen Accord. A mix of green bonds will be issued, but there will also be a need for issuance of carbon taxes and carbon trading schemes to ensure the stability of the fund. Dr. Bracking has the following arguments against the establishment and feasibility of the fund: 1. The fund was has a lot of flaws in its design 2. It was designed to operate as private sector-led 3. Financial solutions such as this are generally misplaced 4. International environmental governance has been a failure by itself. A Problem of Governance The professor mentioned the failure of initial experiments to promote a carbon trading system in Europe and the US before the GCF was proposed. Knowing this, it will be absurd that international organizations still have faith in its feasibility. Also, there is a lack of ideological commitment to financialize carbon in a way that it can mitigate climate change. After all, key stakeholders also have their own disagreements that are systematic and structural in nature. Also, there is an issue of transparency and accountability in selecting the trustees of the fund. Governance structure of the fund was designed to be top-heavy, and there is little space for stakeholders other than national governments. Checks and balances were not cleared out, so as the mechanisms for which it will be ensured. While national governments were chosen to audit the fund's operations in their respective countries, Dr. Bracking argued that it will turn into a failure as a result of being captured by business and political elite. Political Economy It is also interesting to note how Dr. Bracking pointed out the external influences affecting the

operations of the Green Climate Fund. She argues that carbon trading, more so the "financialization of climate change" has not mitigated, if not worsened the current situation to be blamed to the developed countries. The speaker has repeatedly pointed out the "socialization of risk" that is connected with the operations of the fund. While national governments guarantee the loans being given out by the fund, most of the profit will go to off-shore fund managers, in that case making the fund a private undertaking. Being operated as a private fund just like anything else, it cannot be ensured that these fund managers can take the challenge of ensuring that its purpose will be fulfilled. Since bulk of the fund is flown into intermediate investors who decide with free hands what to do with the fund, there will always be cases that the fund will be used for projects it was not meant for, such as fossil fuel plants in exchange for "token" carbon offsets. Most investments of such kind are observed to be used in large infrastructure projects that often turn into white elephants. More so, Dr. Bracking has pointed out how "empty signifiers" has affected how the discourse regarding the fund's operations has been operating. While concepts such as "development", "gender rights" and "environmental protection" has been part of all the discussions regarding the GCF, it is not necessary taken care of in practice. Funny it seems that international leaders are talking about these concepts while not realizing what is really ongoing in the ground.

Insights While the talk is interesting to listen to, it can be noted that little do Filipinos know that such kind of fund exists. As news of the Bangko Sentral ng Pilipinas pledging $1 billion to the International Monetary Fund, people are getting more curious of where how the government is investing money, and if it will be advantageous. It would be great if Dr. Bracking has detailed the country's involvement into the fund, considering that the country has been a climate change hotspot. If the government decides to participate into the fund, it must ensure its role of protecting the interest of climate change-prone countries, and that developed countries will have their fair share. Looking at the current issues facing the fund, indeed there are a lot of problems regarding its management and the policies being crafted for its operation. After all, the international community is divided on the issue of its feasibility, and civil society has been skeptical if it can bring its goals of bringing development funds to disaster-prone areas. More so, the fund has just proven the power relations plaguing the developed and developing. If and when the fund's projects will arrive in the country still has to be guessed. What is important is how the money will arrive to communities that need it most rather than some people's pockets. After all, it's not just finances that are at stake, but lives as well.