The world will need to spend an estimated US$5.7 trillion annually in green infrastructure by 2020 in order to limit global temperature rise to 2 degrees C. This week, it took a step toward creating an institution - the Green Climate Fund - that will be pivotal in achieving this goal.
The GCF celebrated the official opening of its headquarters in Songdo, Korea, amongst notable attendees like the President of the Republic of Korea, Park Geun-hye, UNFCCC Executive Secretary, Christiana Figueres, and World Bank President, Jim Yong Kim.
The GCF is expected to become the main vehicle for distributing climate finance. The opening ceremony marks a concrete step toward making the Fund operational.
The GCF has been working toward the official opening of its offices for more than a year since Korea was selected to host the Fund. Now that it has its new premises, it's time for it to make brisk progress in 2014 to complete the development of its operational policies.
Several major issues remain to be resolved - notably where the funds will come from; on what terms; and how they will be managed. The GCF is aiming to mobilize resources in September 2014 and begin its operations by the end of the year.
Héla Cheikhrouhou, the GCF's first-ever Executive Director, said the GCF should act as the catalyst that tips the balance towards climate-friendly investment decisions.
This will require tackling two big issues that are important for the GCF's operations: strengthening its funding recipients' institutions and systems to ensure effective use of its resources, and identifying ways to incentivize the private sector to play a stronger role in tackling climate change.
The Co-Chair of the Fund's Board, Mr. Jose Maria Sarte Salceda (Philippines) said: "In the Philippines, we have recently experienced in a painful manner why it is so urgent to act on climate change.
"I am, therefore, pleased that the Fund is on track to start its resource mobilization next year with a rapid and substantial initial capitalization, so that we can get the money flowing to the countries which are in greatest need. The opening of these international community so that we can mitigate climate change and adapt to its adverse impacts."
