Supporting NAMAs through the Green Climate Fund: Governance capacities and challenges

1. Supporting NAMAs through the Green Climate Fund: Governance capacities and challenges Mathias Friman, Prabhat Upadhyaya and Björn-Ola Linnér 16-01-14, Stockholm

2. International Environmental Law • Effectiveness depends on: Formal status, level of legitimacy • Traditionally hard or soft divide. • Judged on • Obligation (bindingness); Precision (unambiguous definition); Delegation (authorization given to third party) • Shifting from Binary to a continuum approach • The formal character of law matters less • For ex: Kyoto Protocol flexible mechanisms regulated by means of decisions than the treaty text itself • Green Climate Fund (GCF): • Defined through soft law, yet set up for specific tasks

3. Governance and Capacities • Governance: The organization of collective action • Performative capacity (Arts and Goverde 2006): Actual performance • Indicative capacity: The potential in effectively governing • “Whether ... we can expect a ‘capacity to govern’”? (La Rovereet al. 2002, p. 3) • Governance capacity depends on • Formal laws • Mandate granted to the institutions • But also on soft law

4. Governance challenges • No sovereignty with global community; Dispute settlement procedures weak • Governance challenge for GCF with relation to NAMAs: • Need to establish legitimacy • Manage varied expectations on supporting Nationally Appropriate Mitigation Actions (NAMAs) • Can’t be expected to function in order to affect individual state behavior • Legitimacy among states • Crucial for internationally defined legal obligations • Depends on procedurally just manner

5. Governance Challenges • GCF Board • Expected to respect sovereign rights of countries • Need common criteria for selecting NAMAs • Obligation and precision functions • Joint obligation to long term finance exists; precision missing • NAMA proposals voluntarily in nature • Need to ensure the precision of obligations • Legality of Board decisions difficult to enforce, • GCF’s legitimacy crucial

6. GCF’s Governance capacities • Deals with delegation of decision making powers to GCF and their precision • GCF defined through a COP decision (Soft Law): • States obligations’ non-enforceable; High flexibility • An operating entity to the Convention’s Financial Mechanism (Art 11, UNFCCC) (Hard Law) • Legal status of GCF unclear; Free floating • Legal personalities and privileges granted through GCF’s Governing Instrument

7. GCF’s Governance capacities • GCF meets characteristics of an Independent Intergovernmental Organization (IGO): • Founded on International agreement • Organ with a will of its own • Established under international law • Granted full responsibility of funding decisions • Own independent Secretariat; own budget • Decision on using COP as arbitrator of last resort pending • Indicative Governance Capacity, delegation of powers to GCF and Independence from COP: High

8. GCF relation to COP • Functions under guidance of and conforms to COP • Arrangements can only be changed by consent of both the COP and the GCF • Theoretical constraint • More than just an organ of COP; an example of “inclusive minilateralism” Eckersley (2012) • GCF Board has greater say on funding decisions • GCF Board decisions need not be acceptable to all COP parties: high flexibility

9. Conclusions • GCF granted high governance capacity and independence • Challenge of designing GCF to balance varied expectations for NAMA support remains • A strong shell, but threat of being empty remains