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by William Waren, senior trade analyst

During his campaign for president, Donald Trump demonized the North American Free Trade Agreement (NAFTA), calling it “the worst trade deal” and making false assurances that he would rework NAFTA, and other trade deals, to protect the American people. As the process to renegotiate NAFTA begins, Trump’s rhetoric and actions strongly suggest that he plans to step up his war on the planet.

Trump’s NAFTA “re-do” is highly likely to reflect many elements of the Trans-Pacific Partnership (TPP) and specifically, the portions of the TPP that would undercut environmental regulations. The Administration’s statement on July 17 of its NAFTA negotiating objectives reinforces concerns that Trump plans to use a new NAFTA to hamstring effective environmental regulation across the board and accelerate global warming.

When we compare the evils of Trump’s new trade deal against reality of our current economy, the American people should be extremely concerned about the future of our environment. As trade renegotiations begin in Washington, D.C., on August 16, we compiled a list of ten ways this process endangers our environment.

1) NAFTA investment tribunals threaten environmental and climate safeguards across the board. Like the TPP, the new NAFTA is almost certain to allow global corporations to turn to secretive international investment tribunals to sue governments for millions or billions of dollars if environmental or other public interest regulations interfere with corporations’ expected future profits. These secret tribunals discourage government action like restricting oil and gas drilling, imposing pollution controls, and limiting the use of fracking (hydraulic fracturing).

For example: TransCanada, the company responsible for the Keystone XL Pipeline used a similar provision in the North American Free Trade Agreement to sue the U.S. for $15 billion after the Obama Administration halted construction on the project — a suit that was dropped only when Trump reversed policy and gave the project the go ahead

2) NAFTA trade tribunals also threaten people and the planet. NAFTA rules not contained in the investment chapter are enforced by government-to-government lawsuits before panels of trade lawyers. Those panels have the authority to impose retaliatory trade sanctions such as higher tariffs, but not money damages, on the exports of countries that fail to roll back regulations. This process also presents a threat to sensible environmental and climate policies.

For example: Disputes between the U.S. and Canada or Mexico concerning food safety or animal welfare regulations can be decided and enforced by so-called “chapter 20” trade tribunals.

3) NAFTA regulatory review threatens people and our planet. Regulatory review provisions in Trump’s NAFTA might establish administrative institutions like a regulatory review body. This could be thought of as an international version of the White House Office of Information and Regulatory Affairs, created by Ronald Reagan, which has a reputation delaying and blocking federal agency regulations in the U.S.

The regulatory review process could also establish inappropriate procedures like mutual recognition of safety standards and a bureaucratic process for identifying alleged excessive burdens on business. This could slow down or stop promulgation of environmental, climate, and health regulations.

Among other negative consequences, regulatory review provisions could encourage the inappropriate use of business-friendly, cost benefit analysis that would hamstring public interest regulations. The process inherently gives disproportionate weight to quantitative data and economic costs, while diminishing the perceived importance of qualitative benefits such as saving lives, maintaining the equilibrium of the global eco-system, and protecting wild places.

4) NAFTA threatens sound climate policy. A new deal on NAFTA will likely ramp up global warming by increasing coal, oil and gas exports . Such “free trade” in dirty energy products would accelerate climate change across North America and around the world. Currently, NAFTA’s energy chapter limits Canada’s ability to restrict production of fossil fuels such as tar sands oil. This provision should be eliminated — but it is hard to believe that climate change denier Donald Trump will do so. Other NAFTA rules allow renewable portfolio standards, low carbon fuel standards, and other climate-friendly energy regulations to be challenged for impeding on the business of foreign fossil fuel firms. Trump is not going to willingly fix this problem.

Trump is also highly unlikely to accept new climate protections penalizing imported goods made with high climate emissions, nor is he likely to accept demands by environmentalists that any new deal include a requirement that the U.S., Canada, and Mexico use a “climate impact test” for policymaking.

5) NAFTA threatens green standards for public purchasing. Currently, NAFTA limits a government’s ability to use “green purchasing” requirements that ensure government contracts support renewable energy, energy efficiency, and sustainable goods. Green groups are demanding that a revised NAFTA deal require all three governments to legislate a preference for goods and services with low environmental impacts in their procurement decisions. , Donald Trump is unlikely to agree to any such proposal.

6) NAFTA threatens deregulation of chemical safety standards. NAFTA renegotiation could result in a the roll back of effective regulations, put in place in California and other jurisdictions, related to chemicals associated with breast cancer, infertility and other illnesses. It also could block future reforms at the national level.

7) NAFTA puts family farms at risk. A new NAFTA deal is certain to increase the volatility of agricultural markets, putting sustainable family farms at risk and increasing corporate control of agriculture.

8) NAFTA threatens prudent food safety regulations. Like the TPP, a renegotiated NAFTA could give foreign food exporters greater powers to challenge border inspections, as well as authorize legal attacks on food safety standards. The deal could also substitute private food safety certifications for government inspections in many cases.

9) NAFTA will likely encourage GMOs. A renegotiated NAFTA deal could build in new protections for biotechnology and genetically modified organisms in our food. NAFTA countries could be obliged to quickly approve GMO crops and products . GMO labeling requirements at the state or local level might well be put at risk. Significant patent protections are likely to be given to biotech seed companies.

10) NAFTA threatens bees and our food supply. Like the TPP, a revised NAFTA could thwart efforts to stop the use of bee-killing neonicotinoid (neonic) pesticides. Neonics are a leading cause of bee declines and a threat to crops that depend on bees for pollination.

Header photo via NPR.

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In November 2015, the group Anonymous exposed hundreds of people, including elected officials, as card-carrying members of the Ku Klux Klan. They released their data dump with the hashtag #HoodsOff, harkening of a time when white supremacy and racial hatred was a thing of shame and anonymity.

How things have changed.

Today, white supremacists openly march through the streets brandishing torches and chanting racist slogans. We saw it not just in Charlottesville this past weekend, but in the brazen demonstrations that have been cropping up around the country. A big reason for this spike in hate: Donald Trump’s own rhetoric and actions. Shortly after the elections, the Southern Poverty Law Center released reports on the rise of hate crimes in the US, noting that “Many harassers invoked Trump’s name during assaults, making it clear that the outbreak of hate stemmed in large part from his electoral success.”

But it’s not just Trump’s rhetoric (or lack thereof) which emboldens white supremacists; it’s also the fact that Trump has elevated racists in his Administration. After Anonymous’s exposé, FOE called for “investigations of all elected and public trust officials identified as KKK members and — should the allegations prove true — for the immediate resignations of these officials.” We could not imagine that two years later, openly racist people like Stephen Bannon, Sebastian Gorka and Stephen Miller would join the White House. We find ourselves in a country where being a white supremacist is a political bonafide, rather than political suicide.

For me — born after the civil rights era — this new era of Trumpism has been an experience of “firsts.” And I don’t just mean what we’ve seen on the political stage.

In April, white supremacists planned a gathering in Berkeley around a planned speech by Ann Coulter on the Berkeley campus, one block from our office. As a woman, it was not the first time I walked on the street with my guard up. As a Chinese-American, it was not the first time I had been conscious of my race in public. It was not even the first time this year white nationalists decided to descend on Berkeley. But the demonstrations were getting bigger, and more virulent, with Nazi salutes and ever uglier epithets.

As white supremacist groups converged on Berkeley, it was first time I walked down the street with the prickling thought that someone actually might attack me just for my race. For me, living in a majority-minority city, my “Bay Area bubble,” it was a sober reminder for me of what daily life means for people of color living other places. Of what it might mean to join a regular prayer meeting at my South Carolina church. Of what might happen if I were simply driving somewhere with my partner and daughter, pausing at a traffic stop, and reaching for my ID.

Then in December, I decided to go to a local meeting in my town to confront hate crimes. It was not the first time I had gone to a gathering for racial justice. It was not the first time I took my three-year old to a political meeting. But it was the first time my husband questioned me, gently, “do you think it’s a good idea?” The meeting was being organized because a few months before, about three miles from our house, two men jumped a Sikh man in his car, beat him, ripped off his turban, and cut off his hair with a knife.

It was the first time I wondered at what age a Sikh, Jewish, or Muslim mother begins to teach their child that they could be randomly attacked, or even killed, for wearing a turban, a yarmulke or a hijab. It was the first time I wondered at what age I should tell my son that this level of evil exists in the world.

Is three years old too young?

I went to the meeting, and took him with me. I sat in the back, where he could read books and drive toy trucks on the floor. My friend Claudia, a Latina organizer who was helping run the meeting, was relieved; she had to bring her three-year old and now our kids could play together.

That night helped me process what happened in Charlottesville eight months later, and understand what it means to combat hate. For me, four things are top of mind:

Call out hate when you see it — it’s all of our jobs. It doesn’t matter that Friends of the Earth is an environmental group and not a racial justice organization. Silence is no longer okay. Our first action alert after the election urged people to denounce Trump for naming Steve Bannon as Chief Strategist. We didn’t know what would happen, starting our message with “White supremacists have no place in the White House.” But 70,000 of our activists responded. We all need to call out hate not just in our political lives, but in our personal lives: our communities, workplaces, and families.

Allow yourself to be challenged. This moment, when racism is so overt, can also open our eyes to the more subtle ways in which racism is alive in our society, including racial privilege. White privilege, for example, does not mean that white people have easy lives. But it does mean that they generally do not have to walk out the door every day with the realization that they could get harassed, assaulted or even killed because of the color of their skin.

Get involved, go to that meeting. There is so much that communities can do to come together and develop creative ways to build solidarity and understanding. A few Christmases ago, a man in our town was arrested for threatening to bomb a mosque five blocks from our house. Dozens of people turned out to support the congregation with expressions of love and solidarity. Mingling with neighbors in the courtyard of the mosque, sharing Christmas cookies and sticky dates, learning about Islam and its traditions — I will always remember it as a holy night.

It’s never to early to take your kid. Some day, when my son is older, I will have a real conversation with him about the existence of racism, the brutality of hate crimes. When I do, I hope he can see in his parents what it is like to treat people with respect, to exalt in diversity, and work for racial justice. And I hope to not hide this conversation from him along the way. I hope to show him the bad in the context of the all the good, all the hope. And I want to be able to say to him that there was a time, when he was very young, when white supremacists and neo-Nazis briefly emerged from the shadows — only to disappear when people of decency and goodwill extinguished the torches of hate.

Header photo via The Hill

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A recent bill was celebrated as one of California’s greatest climate policy achievements, but it is actually a huge blow to the cause of environmental justice worldwide.

Richmond, California has been my home for the past 15 years. It’s also home to the largest refinery on the west coast, operated by Chevron, California’s single largest stationary source of greenhouse gas emissions.

For almost four years, Richmond’s environmental justice advocates have been campaigning to prevent Chevron from embarking on a major refinery expansion that would allow the facility to process dirtier, heavier tar sands crude. The campaign fought to convince the Bay Area Air Quality Management District (BAAQMD), the regional air pollution regulator, to establish a refinery-based cap on greenhouse gases and toxic co-pollutants. Such a cap would help reduce the toxic pollution hotspots in Richmond and neighboring refinery communities. Public health experts estimated that such a cap could save 800–3,000 lives regionally over 40 years.

Chevron, awash in tar sands dreams, fought back. They argued that the state cap and trade system, administered by the California Air Resources Board (CARB), already regulated carbon emissions and that additional BAAQMD regulations would interfere with the state’s policy. But in April 2017, CARB sent a game-changing opinion to BAAQMD, clarifying that not only was it okay for BAAQMD to impose stronger rules, but that the state supported them, and “agree[d] more can and must be done to deliver real reductions in pollutants that are impacting the health of residents living near refineries.”

On the day before Trump pulled out of the Paris Climate Agreement, BAAQMD approved a motion to finalize the world’s strongest and most ambitious refinery pollution cap, a remarkable achievement won after years of grassroots, community struggle.

Cap and trade bill a blow to environmental justice

Chevron couldn’t let that victory stand. They went to Sacramento to kill the rule, and they succeeded. The cap and trade bill, which the California legislature passed Monday night, blocks the ability of local air quality agencies from establishing rules limiting greenhouse gases.

The bill also includes a host of other concessions to polluters, including giving away tens of billions of dollars’ worth of free carbon emissions allowances (the vast majority which benefits the oil and gas industry), and allowing polluters to buy carbon offsets instead of actually reducing emissions.

By buying offsets, a polluter like Chevron can continue polluting as usual – or even process tar sands and thus increase their emissions. Offsets let polluters off the hook while allowing pollution hotspots to perpetuate, condemning communities like mine to decades more of toxic pollution.

What racism looks like

Race is the most important predictor of whether a person lives near pollution. You see it in Richmond, where almost 80 percent of people living within a mile of the refinery are people of color.

The 3,000 people that analysis showed would die prematurely if the refinery cap was not put in place – their deaths will not be evenly spread throughout the San Francisco Bay Area. They will not be evenly distributed between rich and poor, white and black. Science and data shows us that they will predominately be people of color.

This is institutional racism: when a bipartisan legislature pushes through public policies like AB 398 that look at the “big picture” and “mean well,” but really just perpetuate patterns of inequality and discrimination.

“Shallow understanding from people of good will is more frustrating than absolute misunderstanding from people of ill will.”

That’s what Dr. Martin Luther King, Jr. wrote in 1963 to his fellow clergymen who disagreed with his strategy of nonviolence. King excoriated moderate whites who asked him to wait for “a more convenient season” to fight for justice, and said those moderates, not conservative extremists, were the biggest obstacle standing in the way of civil rights progress.

As many environmental groups in California and across the country celebrate their cap-and-trade “victory,” I’m reminded of the moderates King chastised. He knew that they were the biggest obstacle to progress. 50 years later that struggle persists. King hoped for understanding but was left with disappointment.

Tonight, as I write this from my home in Richmond, I am disappointed. The vote is over. And despite our efforts, 3,000 people will die, many of them in my town.

After the vote, the California Environmental Justice Alliance tweeted, “EJ communities will suffer the consequences, but our spirit is intact. The EJ community will fight another day.”

I am trying to keep my spirit intact. I am reminding myself of Dr. King’s admonition to always see injustice, and do my part to bring just grievances to the power structure. And since Dr. King ended his letter on a note of hope, I too will try to be hopeful, even during these dark days when racism is rampant in ways both obvious and subtle.

Let us all hope that the dark clouds of racial prejudice will soon pass away and the deep fog of misunderstanding will be lifted from our fear drenched communities, and in some not too distant tomorrow the radiant stars of love and brotherhood will shine over our great nation with all their scintillating beauty.

Amen.

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Beekeepers, farmworkers, and concerned Cincinnati residents gathered outside of Kroger’s annual shareholder meeting on Thursday, June 22, to urge Kroger to stop selling food grown with bee-killing pesticides and offer more bee and people friendly organic food. Kroger is the largest traditional supermarket company in the U.S. However, it stocks its shelves with food grown with pesticides that are harming pollinators, people and our environment.

At the meeting, Friends of the Earth and SumOfUs delivered 417,000 petition signatures directly to Kroger’s CEO, Rodney McMullen and 36 percent of shareholders voted in favor of SumOfUs’ shareholder resolution to separate the CEO and Board Chair position to increase oversight.

Bees are responsible for one in every three bites of food we eat. Kroger’s store shelves would look drastically different if we lose these critical pollinators. Unfortunately, bees are dying at alarming rates. Toxic pesticides, especially neonicotinoids, are one of the leading drivers of both native and managed bee declines.  

Clear solutions can help address the crisis bees face, while improving our environment and protecting our health. Studies show that organic agriculture supports up to 50 percent more pollinator species than conventional, chemical-intensive industrial agriculture. Organic agriculture also maintains healthy soil and clean water and is better for our health. Consumer demand for organic food in the U.S. has risen so rapidly that domestic production can’t keep up.  

So why did we rally outside the Kroger shareholder meeting? Because, as the largest traditional supermarket chain in the U.S., Kroger has tremendous power to help protect pollinators and support a sustainable food system.  Here are three things Kroger can do to protect pollinators, people and the planet:

1) Establish a pollinator protection policy that includes the phase out of neonicotinoids, glyphosate, chlorpyrifos and other pollinator toxic pesticides as well as implementation of alternative, least-toxic pest management strategies in the company’s supply.

We continue to urge Kroger to establish a pollinator protection policy that phases out neonicotinoids, glyphosate, chlorpyrifos and other pollinator toxic pesticides as well as implementation of alternative, least-toxic pest management strategies in the company’s supply chain.

UNDERSTANDING THE ISSUE

A growing body of scientific evidence shows many of the pesticides we routinely use to grow the food we eat are of concern for pollinators. In particular, neonicotinoids (neonics) are a leading factor in pollinator declines, and glyphosate is a key culprit in monarch declines. These two chemicals are the world’s most widely used insecticides and herbicide. Neonics are used on more than 140 crops, and their use has risen dramatically as a result of soy, wheat and canola seed coatings. Recent analyses conclude that coated seeds offer little to no economic benefit to farmers, and that associated economic and environmental losses outweigh potential gains. The good news is that leading farmers are successfully farming without pollinator-toxic pesticide practices.

Protecting pollinators is in Kroger’s best interest. Here is the display we put together outside Kroger’s shareholder meeting to drive home the point that its produce section would be pretty empty if it doesn’t take steps to save the bees and our food system.

Retailers from around the country have made commitments to phase out neonicotinoids, and it’s making a big difference. The world’s largest garden retailers, including Home Depot, Lowe’s, True Value and Walmart, have all committed to eliminate neonics in garden plants and off-the-shelf products (though neither Costco nor Walmart are addressing neonics yet in food production). Costco is taking steps to push their supply chain in that same direction. On the food retailer front, Whole Foods and Aldi have taken steps to reduce food grown with neonics and other pollinator-toxic pesticides in their supply chains.

Considering the size of Kroger’s supply chain and the range of suppliers that work with the supermarket, Kroger could make a huge contribution to improving pollinator health and building a more sustainable food system by working to phase out pollinator-toxic pesticides. A commitment of this magnitude and importance would not only be a boon for the people and the pollinators who bring food to our tables, but it would help protect Kroger’s supply of a range of important foods! 

2) Increase USDA certified organic food and beverages to 15 percent of overall offerings by 2025, prioritizing domestic, regional and local producers.

Organic farming is healthier for bees, butterflies, people and the planet. Organic farms support up to 50 percent more pollinators than conventional farms, helping other beneficial insects flourish and foster biodiversity. Organic farming systems improve soil health, leading to greater water conservation and protecting and regenerating the resources we need to produce healthy food for generations to come.

Organic farming also protects the health of consumers, farmers, farmworkers and rural communities by eliminating the use of highly toxic pesticides. Along with organic production, research shows that pollinators also thrive on rangelands, making certified grass-fed and pasture-raised animal products another key part of the pollinator solution.

Consumer demand for organic products is growing by double digits each year.  Yet, U.S. production of organic crops is not keeping pace — and that’s bad news for our bees, our farmers, farmworkers and all of us. Less than one percent of total U.S. cropland is certified organic. The result is that tens of millions of dollars worth of organic food is imported from countries including Turkey, Romania, China and India to meet U.S. demand. Kroger can be a leader in supporting the expansion of domestic organic farming to support American farmers and boost rural economies while protecting our critical wild and domestic bees — and ultimately the future of our food system.

3) Publicly disclose company policies and progress related to these actions.

Take Action:

We showed up to Kroger’s annual meeting to remind shareholders of the power they have to protect pollinators and our food system. Take action by calling Kroger today and tell them to stop selling food grown with bee-killing pesticides, increase domestic organic offerings, and share their progress in meeting these goals!

Kroger number: 1-800-576-4377

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Forest peoples in Brazil send a message to California: reject tropical forest offsets

California Governor Jerry Brown has aggressively positioned himself as a global climate leader to fill the vacuum created by the arrival of an ignorant climate change denier in the White House. But not all that glitters is green. The Governor has spent the last months promoting the expansion of complicated market-based carbon trading mechanisms, known as “Cap-and-Trade,” as a cornerstone of state and global climate policy — in a move that directly threatens vulnerable communities both in California and abroad.

California’s current Cap-and-Trade program is set to expire in 2020. Last summer the state legislature established ambitious and unprecedented emissions reductions goals for 2030, without extending the authorization of Cap-and-Trade. The Governor signed the emission reductions goals into law — but he made it clear that Cap-and-Trade was the primary option he would consider for meeting those goals.

Intertwined with Governor Brown’s persistent campaigning for Cap-and-Trade, the oil and gas lobby in California, along with a multitude of industrial manufacturers, the carbon-trading lobby, and a number of business friendly environmental organizations, have also been pushing hard to make the market-based mechanism the foundation of future California climate policy.

This summer Governor Brown has gone into a full-court press to pressure the California legislature to approve a Cap-and-Trade program that would rely heavily on “offsets” — a type of carbon “credit” that a polluter, such as an oil refinery can purchase to legally “neutralize” its pollution — despite the fact that the pollution still occurs. Regardless of the dubious science and documented injustices of offset schemes, Governor Brown, the oil and gas industry, and their allies among a few of the big green groups have continued to aggressively promote the use of offsets as a primary means to achieving California’s emission reductions goals.

Among the offset schemes that the Governor and fossil fuel companies such as Shell, BP, and Chevron want incorporated into the state’s Cap-and-Trade program are a variety of tropical forest carbon offset which would come from partner jurisdictions around the world, such as Central Kalimantan, Indonesia, or Cross River State, Nigeria. Governor Brown has also continued to operate from a 2010 Memorandum of Understanding signed between California and the states of Chiapas, México and Acre, Brazil back when Arnold Schwarzenegger was governor of California. Acre is specifically highlighted in current proposals as the first tropical forest state with which California plans to “link” its carbon market. The linkage would be based on an international carbon trading program known as Reducing Emissions from Deforestation and Forest Degradation, or REDD. Due to conflicts and human rights concerns regarding indigenous land rights and violations of the right to Free, Prior, and Informed Consent, REDD has become one of the most controversial and high-risk climate policy programs out there.

In facing the development of these market-based policies in far-away places like California, forest communities of the Brazilian Amazon recently held a gathering in the rubber tapper stronghold of Xapuri. Xapuri was the home of the internationally known labor and land rights advocate Chico Mendes, who was assassinated in the late 1980’s for opposing road building and other mega-projects in the Amazon. Representatives of indigenous and traditional communities that are currently and potentially affected by REDD projects and associated tropical forest management schemes came together in Xapuri at the end of May to discuss the impacts of climate policy on their access to territory, their forests, and their livelihoods.

Among the organizers of the gathering was Dercy Telles, who worked side by side with Chico Mendes in the years before his assassination. During the gathering Dercy was moved to make a brief video statement for California policy makers and climate activists who may not be aware of the problems with tropical forest carbon offset schemes, and for California activists on the frontlines of day-to-day pollution from California’s fossil fuel industry.

In her statement, Dercy describes how their forest communities must fight against policies like REDD that “aim to exterminate rural populations.” She minces no words in describing that their communities have come to see these climate policies as “nothing but a bunch of false solutions to global warming issues” “based on lies” and “on selling illusions to the less privileged.” The forest people of the Amazon, Dercy says, “want people in California to know that we are fighting the same fight in solidarity” and that “we are going to keep on fighting for as long as we have strength and courage.”

Watch Dercy’s full video message to California climate activists here.
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The IFC doesn’t know what a lot of its money is doing, and that’s bad.

Though the subject matter might at first seem a bit dull, a recent monitoring report of the financial sector lending of the International Finance Corporation (IFC) is a doozy for the warnings it provides to the Green Climate Fund (GCF).

The International Finance Corporation (IFC), the World Bank Group’s private sector lending arm, had a financial intermediary (FI) portfolio of $20.4 billion at the end of the 2016 fiscal year. In March 2017, the Compliance Advisor Ombudsman (CAO), the independent watchdog of the IFC, put out its Third Monitoring Report of IFC’s Response to: CAO Audit of a Sample of IFC Investments in Third-Party Financial Intermediaries. In the sample of FI investments the CAO reviewed, it found systemic non-compliance with IFC policies throughout the investment process.

Techno-mumbo-jumbo, yes. But this bank jargon actually has real-world importance for people living in poor countries. To put it in regular-person-speak, there are major problems with IFC-financed activities channeled through financial intermediaries (like commercial banks and private equity funds), as many in civil society have repeatedly noted. Detrimental environmental, social, and development impacts have taken a toll on people’s lives and livelihoods throughout the developing world. Inclusive Development International has even begun keeping a database to track just a portion of IFC FI investments in harmful sub-projects, along with a four-part investigative series done in collaboration with several other groups, Outsourcing Development: Lifting the Veil on the World Bank Group’s Lending through Financial Intermediaries.

What’s the GCF connection here? 

On many levels, the GCF is modeled after the IFC, especially in its reliance on FIs to do the actual implementation of projects and programs. But the GCF has significantly less actual oversight capabilities and far fewer resources. To give a sense of scale, the IFC had 3,757 staff in 2016; the GCF had 76 staff as of December 1 of that year. The CAO report should thus be viewed as a flashing “hazard” sign for the world’s premier multilateral climate fund, especially with regard to the GCF’s mushrooming reliance on FIs.

NUMBER 1: Doing financial intermediation the right way. Though it has magnitudes more capacity than the GCF to monitor its financial sector lending and compliance with environmental and social safeguards, the IFC is doing a very poor job of it. The CAO found that the “IFC does not, in general, have a basis to assess FI clients’ compliance with its E&S [environmental and social] requirements.” That’s an extremely troubling finding for an institution mandated to improve the lives of poor people in developing countries, especially since many of the sub-projects are higher risk and thus have the potential to cause serious environmental and social harm.

Now imagine the situation for the GCF and its staff-strapped Secretariat. Already-approved GCF funding proposals that are reliant on FIs could result in many hundreds of sub-projects worth hundreds of millions of dollars. If the GCF Board and Secretariat don’t take course-correcting measures, the IFC’s FI experience could represent just a tip-of-the-iceberg scenario for the GCF.

This chart includes approved GCF projects dependent, in part or in whole, on financial intermediation.

I am not proposing that none of these projects is worth doing. Some of them are very worthwhile, while others will likely be riddled with problems. But the point is that, based on reams of experience accumulated by the IFC and other development banks, the deployment of FIs requires an abundance of oversight and due diligence which the GCF is not yet set up to provide, nor does it seem likely to be prepared to do so in the near term.

Ways forward:

  • The GCF needs to scale down its financial sector investments so as to match its ability to actually make sure sub-projects are in compliance with GCF safeguards and advance sustainable development.
  • Another option would be for the GCF to rule out support for higher risk sub-projects until such oversight capacity is in place. 
  • The risk categorization of a particular funding proposal should be based on the highest level risk sub-project possible that could be financed by the proposed program. In other words, if it’s possible that a program would finance a Category A (i.e. high risk) sub-project, then the entire program should be assigned the risk category of A. (This is not currently the case. Medium risk Category B programs could potentially finance Category A sub-projects.)
  • All Category A and B sub-projects should come to the GCF Board for approval.

NUMBER 2: Safeguards tailored to the GCF. Rumors have been circulating that some on the GCF Board and Secretariat are pushing to make the IFC’s Performance Standards (i.e. the IFC’s environmental and social safeguards), now used on an interim basis, the GCF’s own permanent safeguards. But the Performance Standards, in principle and implementation, fall short of what is needed to actually meet the sustainable development mandate at the IFC — both for projects financed directly by the IFC and indirectly through FIs. If the IFC is struggling heartily to implement their safeguards, then the GCF — a far less-resourced institution — is prone to faring even worse.

Further, the IFC Performance Standards were designed for an institution with a singularly private sector focus. The GCF has both a private sector and a public sector focus. The same safeguards are most certainly not fit for purpose at the GCF, and are not adequate for long-term use. Moreover, the Performance Standards do not represent international best practice in multiple areas and have themselves been long-criticized for a plethora of shortcomings. For example, their interpretation of the right of Indigenous Peoples to Free, Prior and Informed Consent is problematic, and they don’t have a commitment to a human-rights-based approach. This is particularly salient given that the GCF serves the Paris Agreement, which calls on countries to “respect, promote and consider their respective obligations on human rights, the right to health, the rights of indigenous peoples, local communities, migrants, children, persons with disabilities and people in vulnerable situations and the right to development, as well as gender equality, empowerment of women and intergenerational equity.”

A way forward:

  • The IFC Performance Standards should be replaced in a timely manner with the GCF’s own environmental and social safeguards grounded in a human-rights-based approach, developed through a process involving international best practice stakeholder consultation.

NUMBER 3: Taking a break to get the GCF’s house in order. There are many other GCF policies that still need to be developed, approved, or revised. These include the long-delayed simplified approval process, a much-needed review of the proposal approval process, the establishment of a full-fledged GCF environmental and social management system with the development of the GCF’s own environmental and social safeguards, a review of observer participation, the full establishment of the GCF’s Accountability Mechanisms, an accreditation strategy, an Indigenous Peoples Policy, etc., etc., etc. (to quote the King and I).

A way forward:

  • The GCF needs to put a pause on further approvals of funding proposals and accreditations and focus its July meeting solely on addressing much-delayed fixes to GCF policies and practices. 
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Donald Trump announced this afternoon that the United States will begin the process of withdrawing from the Paris Agreement. During his remarks, Trump made a series of inaccurate and misleading statements about the Green Climate Fund in connection to his withdrawal decision.

The United Nation’s Green Climate Fund (GCF) is the world’s premier multilateral fund to help vulnerable women, men, and children in developing countries confront the climate crisis.Trump’s venomous attack on the Green Climate Fund spewed lies and ignorance.

We need to correct the record:

Trump said: The Green Climate Fund is a $100 billion fund.

Reality: The GCF is a $10.3 billion fund. Trump’s $100 billion figure comes from the amount that developed countries have collectively committed to mobilize annually for developing countries by 2020 through a process un-related to the GCF. There has never been an intention for the GCF to be a $100 billion fund.

Trump said: U.S. funding for the GCF represents a major portion of our country’s already massive foreign aid payment.

Reality: The U.S. contribution to the GCF represents 0.00559% of U.S. GDP. In total, poverty-alleviation focused foreign aid represented just 0.8% of the federal budget over the past several years.

Trump said: The budget for the so-called war on terror was raided to pay for the U.S. contribution to the Green Climate Fund.

Reality: When a statement is so far from any basis in fact, it is hard to rebut. Funding for the Green Climate Fund comes from U.S. taxpayers, who overwhelmingly support action on climate change. U.S. contributions have come from a line item under the Department of Treasury and discretionary funds from the Economic Support Fund.

Trump said: The U.S. is the largest contributor to the GCF.

Reality: Sweden, for example, contributes far more per capita than the U.S.

Trump said: The GCF could obligate the U.S. to commit tens of billions of dollars.

Reality: All contributions to the GCF are voluntary.

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