Strategy and Finance Minister Bahk Jae-wan, seventh from left in the first row, and Incheon Mayor Song Young-gil, sixth from left, pose with Han Deok-su, third from left, chairman of the bidding committee to host the secretariat of the Green Climate Fund, and other guests at a convention center in the western port city last month. / Courtesy of Ministry of Strategy and Finance

Incheon stays in race for hosting Green Climate Fund

By Kim Jae-won

Incheon is struggling to cope with financial problems that could eventually force it to give up the rights to host the 2014 Asian Games. But the troubled port city believes edging Germany’s Bonn in a bid to host the United Nation’s Green Climate Fund (GCF), loosely described as the Internet Monetary Fund (IMF) of climate change issues, will be a nice consolation prize.

The GCF was founded within the United Nation Framework Convention on Climate Change (UNFCCC) as a mechanism to transfer money from developed economies to developing ones in order to support environment protection policies amid rapid industrialization.

The GCF will support projects, programs and policies of its developing-nation members using a various funding frameworks and channels. The fund plans to raise $100 billion a year by 2020. To kick-start environmental projects, a Fast Start Funding of the GCF was agreed, encompassing $30 billion for 2010 to 2012.

The interim secretariat of the GCF is based in Bonn, and the organization seeks to find a permanent base by the end of this year. Six cities, including Incheon, applied to host the secretariat of the GCF expecting to gain economic benefits and a better international reputation.

Among them, Bonn is ahead, while Incheon and Geneva of Switzerland are considered runners-up, according to officials at Korea’s finance ministry. The other candidate countries are Mexico, Poland and Namibia.

Bonn is eager to host the secretariat as the former capital of West Germany and former interim capital of unified Germany seeks to fill the vacant offices left when the government moved to Berlin in the late 1990s. It already hosts about 20 headquarters of international organizations and institutions, such as the International Union of Conservation of Nature Environmental Law Center, the UNFCCC and the United Nations Convention to Combat Desertification.

Experts say that Bonn also can benefit from economics of size as many global organizations are based in Europe. Due to this, many countries may prefer Bonn or Geneva to Incheon.

However, Korea’s Finance Minister Bahk Jae-wan will appeal to the international community by highlighting the nation’s two environmental projects — the nationwide tree-planting campaign and the Four River project for the “renewal” of the country’s four biggest rivers.

“Korea succeeded in reforesting through a nationwide tree planting movement. We have also completed the Four River project. We will explain the accomplishments to the world as a role model that encompassed both the mountains and the rivers,” Bahk said in a luncheon meeting with reporters last month.

He also said that Korea will argue that an East Asian country should host the GCF office as the region emits about half of the carbon dioxide in the world. He stressed that Korea can intermediate between the advanced countries and developing nations.

Despite this critics say that the finance minister’s strategy is not attractive enough. They say effectiveness of the Four-River project has not been proven yet. The government argues that the nation overcame flood damage with the huge project which cost about 20 trillion won, but critics say that money was wasted as there have been no advantages.

The finance ministry is relying on traditional methods of asking for cooperation from allies, but it seems unlikely as most of the bidding countries also have close relationships with European nations.

Bahk has been promoting Incheon’s case internationally, even mentioning it during last month’s Asian Development Bank (ADB) meetings.

“As an early mover in green growth, Korea very much hopes to host the Secretariat of the GCF, and through all this, we’d like to contribute to the international community’s efforts to address climate change,” Bahk said in a speech during the ADB meetings.

The minister emphasized that Korea adopted “Low Carbon Green Growth” as a national policy vision in 2008, and led related discussions at an international level to include the G20. Also, he said that the nation now supports developing countries in their efforts to better cope with climate change.

Considering that Song Young-gil, the mayor of the city, recently said that Incheon will give up hosting the Asian Game should the central government deny financial support, illustrating the deep fiscal problems of the municipal government, many obstacles remain ahead of the plan to host the organization.