On Proposalism - the New Modus Operandi in Climate Finance

Now that the dust has settled and the time of  «Paris is good, but not ambitious enough» statements is over, I'd like to take a step back and highlight one major shift in global climate finance. Over the last few years, I have frequently written articles about «carbon credits». I admit, the rules for making and paying for them were a nightmare of complexity, but there was one thing I really liked about them: We used to pay for climate change mitigation in developing countries only after we had seen results. All the risks of project failure were carried by local actors. We did not need to understand the details of how the electricity market in Burkina Faso works to support renewable energy there. This mechanism has, for now, been fully replaced by the «Green Climate Fund» (GCF).

The magic of proposals

The GCF is a curious institution - half bank, half donor, governed by a board with 50% developing country government representatives and 50% donor country representatives. It also has a great team struggling to implement the actual work, out of an office on an artificial peninsula a little south-west of Seoul, Korea. A significant share of the promised 100 billion USD per year in climate finance will flow through it. It operates in a similar way to a classical development bank, but focuses on climate. It takes some effort for an institution to get «accredited», but once that is done, any number of proposals for funding can be submitted. The GFC then evaluates the proposals based on its (publically available) -investment framework?.

Writing and evaluating climate-related proposals was a major part of my own work during the last couple of months; I've just written a proposal asking for funding to train a developing country government in proposal writing, so I feel qualified to say a few words on the topic. I've chosen to do so by coining a new term in the form of a fictitious Wikipedia entry:

While writing I noted that this lamentable practice not only wreaks havoc in climate finance, but all over the place! Looking forward to a lively discussion on alternative ways to allocate public budgets to complex problems.

(Dr. Tim Reutemann, UNEP-DTU/ETH-Zukunftsblog)