Challenges to climate finance Dr. Hanne Knaepen 6 July 2016
Outline 1 2 3 4 The global climate finance architecture A closer look at the Green Climate Fund (GCF) 3 Key challenges for effectiveness 4 The way forward ECDPM
1. The global climate finance architecture ECDPM
1. The global climate finance architecture Climate finance sources Public sources Development bank-type instruments Carbon markets Private capital Source: OECD, 2014. ECDPM
1. The global climate finance architecture (cont.) 1991, Global Environment Facility (GEF) 2009, Adaptation Fund (AF) 2011, Green Climate Fund (GCF) Multilateral Germany, International Climate Initiative UK, International Climate Fund Norway, International Forest Climate Initiative Bilateral Regional: African Risk Capacity (ARC), Caribbean Catastrophic Risk Insurance Facility National: Benin National Fund on Climate Change, Mali Climate Fund Regional and national ECDPM
1. The global climate finance architecture (cont.) ECDPM Source: www.climatefundsupdate.org
1. The global climate finance architecture (cont.) COP21: first COP with one full day on agriculture Increasing climate financing for agriculture 2012: Adaptation for Smallholder Agriculture Programme (ASAP), IFAD Largest global financing source dedicated to support adaptation for smallholders so they can access information tools and technologies that help build resilience. Special objective: enable smallholders to benefit from climate finance. ECDPM
2. A closer look at the Green Climate Fund (GCF) ECDPM
2. A closer look at the GCF Key features? 2010 (Cancun COP): developed countries’ commitment to mobilise 100 billion USD annually by 2020 for climate action in developing countries (Initial pledging goal of 10 billion USD: reached); Main channel to solve complexity of climate finance; Board: 50/50 representatives from developed and developing countries; Balanced finance between adaptation and mitigation (50/50); Key role private sector; Risk-management framework; Recipients submit proposals through Nationally Designated Authorities; Wide accreditation potential. ECDPM
3. Key challenges for effectiveness ECDPM
3. Key challenges for effectiveness No internationally agreed definition of climate finance + lack of transparency; Most climate funding to emerging countries, not to the poorest; Funds are inflexible and risk averse; Structure of climate financing is fragmented + bureaucratic; Funds lack inclusivity; How to implement? ECDPM
3. Key challenges for effectiveness (cont.) Three key challenges for GCF Benefits and rights of the poorest are not addressed directly and clearly in the Results Framework. 50/50 split, but will the Nationally Designated Authorities (NDAs) prioritise adaptation? And, how to encourage the private sector to invest in adaptation? Will subnational institutions and stakeholders (farmers!) have free and fair access to funding and to decision-making of the NDAs? ECDPM
4. The way forward ECDPM
4. The way forward How to trigger trillions, not billions? How to implement the NDCs in an innovative way? How to ensure inclusivity? How to ensure transparency? http://climatepolicyinitiative.org/press-release/global-coalition-governments-investors-foundations-launch-four-new-financial-instruments-catalyze-billions-developing-country-climate-action/ ECDPM
4. The way forward 3 guiding questions for discussion: ECDPM
Thank you very much. www.ecdpm.org hk@ecdpm.org