challenges to climate finance
TRANSCRIPT
Dr. Hanne Knaepen
6 July 2016
Challenges to climate finance
Outline
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1• The global climate finance architecture
2• A closer look at the Green Climate Fund (GCF)
3• Key challenges for effectiveness
4• The way forward
1. The global climate finance architecture
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1. The global climate finance architecture
Page 4ECDPMSource: OECD, 2014.
Climate finance sources
Public sources
Development bank-type
instruments
Carbon markets
Private capital
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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
Page 6ECDPM Source: www.climatefundsupdate.org
1. The global climate finance architecture (cont.)
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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.
2. A closer look at the Green Climate Fund (GCF)
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2. A closer look at the GCF
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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.
3. Key challenges for effectiveness
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3. Key challenges for effectiveness
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1. No internationally agreed definition of climate finance + lack of transparency;
2. Most climate funding to emerging countries, not to the poorest;
3. Funds are inflexible and risk averse;
4. Structure of climate financing is fragmented + bureaucratic;
5. Funds lack inclusivity;
6. How to implement?
3. Key challenges for effectiveness (cont.)
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Three key challenges for GCF
1. Benefits and rights of the poorest are not addressed directly and clearly in the Results Framework.
2. 50/50 split, but will the Nationally Designated Authorities (NDAs) prioritise adaptation? And, how to encourage the private sector to invest in adaptation?
3. Will subnational institutions and stakeholders (farmers!) have free and fair access to funding and to decision-making of the NDAs?
4. The way forward
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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?
4. The way forward
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3 guiding questions for discussion:
