The Green Climate Fund is one of the great hopes for combating global warming. The United Nations program was created to help developing nations reduce air pollution in a way that encourages "sustainable development" and is also "country-driven."
Some experts argue that this means the money should go only to governments. But to reduce global warming, the private sector must be actively involved. After all, three quarters of all climate investment comes from private investors.
The world's developed nations have pledged to raise $100 billion a year from public and private sources by 2020 for the GCF. The money will be used to finance international efforts to reduce greenhouse gas emissions, promote sustainable development and reduce poverty. In the meantime, participants have bickered over exactly how best to disperse the funds.
A few activists have expressed outrage that some of the GCF funds would go to private companies. Short blogs and long diatribes have been written excoriating the very notion in recent weeks.
This is silliness. No one is suggesting that private companies should profiteer from the United Nations' project. Countries that are struggling to catch up to the modern era – the countries that would receive these funds – need all the help they can get.
Siphoning off money for private enrichment would be wrong and should be rejected. But partnering with the private sector in careful, long-term ways would amplify the benefits of the GCF. If managed well, the results could continue for many years after the initial investment is made. Air pollution abatement can and has become an on-going business, which is good for everyone.
In particular, policies with an unwieldy name – nationally appropriate mitigation actions, or NAMAs – are being created in developing countries and would not only help the environment but also improve communities and boost local economies.
These public-private partnerships are an ideal fit for long-term air pollution mitigation and the GCF.
The public often assumes that reducing air pollution also means cutting jobs. That doesn't need to be the case. In places like Colombia and Chile, the NAMA movement has taken root and has proven that governments can protect the climate and reduce global warming while also helping developing countries grow in a sustainable way.
A NAMA is a win-win proposition and similar programs are already being implemented around the world.
Germany and the United Kingdom have created a path-breaking, multi-million-dollar fund to finance NAMAs in developing nations, which offers a model for the GCF. Their first recipients will be announced later this year. In recent months, representatives of dozens of developing nations auditioned their NAMAs for donor nations, which, in turn, showed considerable interest.
And why shouldn't they? The money would go not for one-time projects that would cut emissions and then disappear, but rather would support governmental policies that would catalyze private sector investment – and have a real chance to be self-sustaining.
In Colombia, for example, a NAMA would reduce the waste going to methane-emitting landfills by creating a composting and recycling business that would serve as an alternative. In Chile, a NAMA-like mechanism is being established to help stabilize the price of renewable electricity until the market for renewable energy is strong enough to stand on its own.
All of these NAMAs require cooperation between government and the private sector – a worthy goal. Such a criterion for project selection would be fitting for the GCF. It would be a game changer in the world of climate change policy that would multiply the benefits of scarce dollars for environmental protection.
NAMAs leverage businesses to improve the lives of people in developing nations. They should be a welcome participant in the United Nations' plans to reduce global warming.