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The dangerous drifting shift of the GCF towards bioenergy

20 Mar, 2018
Posted in Blog, Climate, Climate Finance

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By: Coraina de la Plaza*

The last Green Climate Fund Board Meeting, BM19, took place in the funds´ headquarters, in Songdo, South Korea from February 26th to 1st March. This meeting had an overpacked agenda to address, among other things, a number of key policy gaps that the GCF has been dragging for a while and a total of 23 project proposal to be considered by the Board.

One of the key policies was the Indigenous Peoples policy, which after two rounds of public consultations and nearly 200 submissions from Indigenous Peoples and Civil Society Organizations was finally approved. Although there is still room for improvement for this policy, there was a sense of urgency to have it approved as the number of project proposals considered and approved by the GCF Board that directly or indirectly affects Indigenous Peoples and local communities, is considerably growing and this policy is a good and needed tool to further include Indigenous Peoples in decision-making process. Likewise, and with overall support of civil society, the Environmental and Social Policy was approved during this meeting.

Another key policy for this meeting was the (updated) Gender Equality and Social Inclusion Policy (GESI). The reviewed text of this policy was quite comprehensive and incorporated many of the recommendations made by civil society. Sadly, due to reticence’s related to national circumstances and the requirement of producing sex disaggregated data on sexual orientation expressed by Board Members from Saudi Arabia, Egypt and Cuba, this policy was deferred. The proposal made was to change the language so countries could decide about the application of the policy according to their national view or position on the matter. That would have mean a weaker policy than the previous version, allowing national agencies to ignore gender equality. In many countries women are still deprived of many of their basic rights and therefore, any policy that could, in any way, allow the perpetuation of that situation should not be approved in any context, much less in the international sphere.

The discussion on the selection of a permanent Interim Trustee was a heated one among Board Members but for now the World Bank continues as the appointed provisional Trustee. Likewise, the first formal replenishment process discussion took a considerable amount of time until and overall there was a clear division between develop and developing countries board members in terms of the process for the replenishment itself and the target of the replenishment. The Secretariat presented 3 options to be considered by the Board, which caused division as well. After much discussion, the Board decided to ask the Co-Chairs to oversee the formulation of the policies and procedures for the replenishment process. The Co-Chairs will oversee this process in consultation with Board members and the support of the Secretariat.

Moreover, all 23 project proposals were approved for over USD 1 billion, most of them without any objection from Board Members or just a few questions or request for more information about some projects´ elements. This makes a total of 76 projects and USD 3,7 billion allocated for those projects. However, some of the projects approved during this meeting pose the questions of how transformational the GCF is, and even the ultimate goal of addressing the climate crisis. PROEZA (FP062), a project proposed by FAO and the Paraguayan government, is a clear example of this.

PROEZA was already presented for the Board´s consideration in October 2017 but it was rejected. However, and with just a few changes in the proposal like the amount of economic support from the GCF – it was initially over USD 42 while now is little more than USD 23 million- and despite the concerns expressed by several Paraguayan organizations, the project was approved with only one objection expressed by the CSO observer.

PROEZA has a very problematic component which provides concessional credits to create 24,000 hectares of plantations, called “New Generation Forests Plantations” [6]. These plantations are directed towards producing bioenergy, especially for the soy industry, such as energy to dry soy grains. Soy production destined towards Northern animal factory farms as feedstock, along with bioenergy production are the two main causes of deforestation in the Eastern half of Paraguay, where most soy plantations are found [7]. Therefore, this project clearly undermines the goal of the GCF to address the climate crisis in a transformative way.

PROEZA was not the only project dealing with biomass presented during this meeting, and in fact a project that was withdrawn for consideration just a few days before the meeting mainly consisted on 4 plants for energy production fed by biomass largely coming from monoculture tree plantations and pellets.

Due to the future likely increase of project proposals within the GCF dealing with biomass and bioenergy, a working group of civil society organizations prepared a briefing that was circulated among Board Members and alternates explaining all the negative social and environmental impacts as well as the erroneous assumption that biomass energy is carbon neutral.

There is another worrisome element in PROEZA. Contrary to the policy on Indigenous Peoples approved during this meeting and the definitions on Free Prior and Informed Consent (FPIC) FCIP that it contains, this project proposal at the moment is in clear violation of the IP policy. In fact, the project proposal states: « The Government of Paraguay and FAO shall conduct follow up activities to advance the free, prior and informed consent process. It was agreed after 4 discussion meetings with the indigenous organization leader, to resume and continue the consultations process once the project is approved”. The project proposal also states that « The purpose was to share specific information regarding PROEZA implementation with local community leaders who could add local knowledge to the project’s proposal.” There is more information in the proposal that clearly points to a flawed stakeholder engagement and an narrow mapping of Indigenous Peoples, peasants, women and local communities organizations that should have been actively involved from the project´s onset.

At last, during the last day of formal discussions the dates and location of the remaining Board meetings for this year were also agreed. BM20 will also be take place in Songdo from 1st -4th July. The invitation signed by the Minister of Oil from Bahrain offering to host BM21 was accepted and the meeting will be held from 17th-20th October in the capital, Manama.

*Coraina de la Plaza is the Indigenous Rights Advisor and Research Assistant of the Global Forest Coalition