The Organizational Rationale of Funding Decisions in the Climate Regime: How Organizational Procedures Shape Decisions of the Green Climate Fund and the Adaptation Fund

Funding decisions in the climate regime are heavily affected by organizational procedures designed to reduce the implications of member state preferences and create a criteria-based organizational decision rationale. While the member states of the United Nations Framework Convention on Climate Change (UNFCCC) have assigned part of the regime’s financial mechanism to the Global Environment Facility, they have established two funding schemes, namely the Adaptation Fund and the Green Climate Fund, within the institutional framework of the Convention. We conceptualize the organizational component of the UNFCCC, the Kyoto Protocol, and the Paris Agreement with the Conference of the Parties (CoP) in its center as an international treaty management organization, and examine the organizational influence on funding decisions. Theoretically, the paper shows how organizational structures, including funding criteria and organizational objectives can reduce or fully abolish the opportunities for the pursuit of member state preferences and create a distinct organizational rationale according to which organizational decisions are made. Accordingly, different organizational structures should lead to different organizational rationales and result in systematically different decisions. Empirically, the paper compares the organizational rationales of funding decisions in the Adaptation Fund and the Green Climate Fund. For each of these Funds, we examine the institutional setup as established by COP decisions and the resulting procedure of funding decision-making. We investigate the expectation that the organizational procedures diminish the room for member states to pursue their case-specific preferences successfully with case studies on the settlement of disputed funding cases in which major member states or groups of states had divergent preferences.