tracking public and private climate finance
DESCRIPTION
This presentation gives an overview of OECD work on tracking public and private climate finance, including bilateral and multilateral development finance and private finance.TRANSCRIPT
TRACKING PUBLIC AND PRIVATE CLIMATE FINANCE OECD side event at the UNFCCC COP20
Lima, 4 December 2014
Stephanie Ockenden, Policy Analyst Development Co-operation Directorate
Raphaël JACHNIK, Policy Analyst Environment Directorate
0 20 40 60 80 100
Mobilised Private Finance
Private Finance
Multilateral Concessionaland Non-Concessional
Flows
Bilateral Other OfficialFlows
Bilateral OfficialDevelopment Assistance
KnownUnknown
We have only a partial picture of climate-related
finance to developing countries…
Illustrative magnitudes & data gaps
?
?
?
Annual Av., USD, Bn
Initiatives to improve
data quality & coverage:
OECD DAC Task Team
& DAC post-2015
development finance
mandate
International
Development Finance
Club (IDFC)
MDB Joint Approach
OECD-led Research
Collaborative on
Tracking Private
Climate Finance
Climate-related development finance:
Improving the statistical picture…
3
4
Presenting an integrated picture of bilateral & multilateral climate-related development finance flows in 2013…
Commitments of USD 37bn in 2013, reported by DAC members,
MDBs, GEF & UAE
Robustness -> Project-level data
collected and monitored against
standardised classifications,
improves consistency and avoids
double counting
Transparency -> data
publically available
Collecting & compiling project-level data...
Owing to data gaps, USD 37bn represents a low-end range based
on data reported....
• Rio markers identify projects climate change objectives – principal or significant
• Bilateral Official Development Assistance (ODA), 28/29 members + UAE,
• Over 6,000 activities
• Bilateral Other Official Flows (OOF), partial data only for 4 members
Bilateral
• MDB Joint approach - AfDB, AsDB, EBRD, EIB, IDB, IFC, and WB
• Climate-related multi funds – GEF
• Over 1,000 activities
• Gaps remain on data from other funds..
Multilateral
Total 37 billion
13 bn
10 bn
Bilateral principal
Multilateral outflows
3.4 bn
14 bn
Bilateral significant
Non-DAC core contributions
MDB’s capital resources
DAC core contributions
Recipient perspective Provider perspective
Two perspectives can be taken from the statistical system....
Imputed multilateral contributions
Total 37 billion
13 bn
10 bn
Bilateral principal
Multilateral outflows
3.4 bn
14 bn
Bilateral significant
Non-DAC core contributions
MDB’s capital resources
DAC core contributions
Recipient perspective Provider perspective
13 bn
10 bn
Climate-related development finance ≠ UNFCCC Climate
Finance
Rio markers are descriptive, allowing for an approximate
quantification of financial flows
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Future improvements underway for 2015:
4 December 2014 Tracking private and public climate finance
Quality and Coverage
Use of data for reporting
Broader measures
• On bilateral ODA and OOF
• Increasing data collection from multilateral providers.
• Advancing collaboration between the OECD, MDBs & others
• Improving data and understanding from a recipient perspective
• Developing the evidence based to support more quantified reporting
• Improving imputed multilateral contributions
• Improving coverage of data beyond ODA, including on amounts mobilised from the private sector through public actions (e.g guarentees)
Towards improved data and methods for estimating mobilised
private climate finance
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+/- USD 35 billion per
year
Energy efficiency
Transport
Agriculture
Water Waste
Industry
Data and methodological challenge
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Source: Caruso R. and R. Jachnik (2014), Exploring potential data sources for estimating private finance, OECD Environment Working Paper http://dx.doi.org/10.1787/5jz15qwz4hs1-en
Renewable energy
Tracking private climate finance Estimating mobilisation
Bilateral public guarantee
Multilateral public loan
Private loan
Private equity
Domestic public
support policy
Bilateral grant and capacity building
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Measuring private finance mobilised by public finance in OECD DAC statistics
4 December 2014 Tracking private and public climate finance
Scope
Methods for public finance instruments aimed at mobilising private capital To date: syndicated loans, shares in collective investment funds, guarantees
Causality
Complex to measure statistically
Need for assumptions that: Reflect reality Are conservative Are commonly agreed Vary by financial instrument
Source: On-going OECD DAC work on the mobilisation effect of public development finance
Example of DAC method for guarantees
Amount mobilised defined as face value of debt/equity instrument guaranteed
· Causality: assumption that private financier would not have participated without a public guarantee
· Attribution: pro-rata-based in case of co-guarantors
Attribution
Rules and methods need to vary by financial instrument
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Estimating the mobilisation effect of public finance and policy interventions
4 December 2014 Tracking private and public climate finance
Source: Haščič I., M. Cárdenas Rodríguez, R. Jachnik, J. Silva and N. Johnstone (2014), Public interventions and private finance flows: empirical evidence from renewable energy financing, OECD Environment Working Paper (forthcoming)
Econometric simulation of the effect of public interventions renewable energy private finance flows (2000-2011) from developed to developing countries
41.5%
15.7%
14.8%
3.3%
2.4%
0% 10% 20% 30% 40% 50%
All public interventions
North-South bilateralpublic finance
Multilateral public finance
Feed in tariff indestination country
Renewable energy quotain destination country
Testing methods: exploratory results
Likely underestimate
Remaining % could be explained by country and market conditions.
Currently only possible for renewable energy (mostly wind and solar) and at aggregate level
Missing suitable data on key variables e.g. domestic investment conditions
In the short-term
· Test and implement practical methods
· Provide transparency on underlying definitions, assumptions and limitations
In the longer term · Converge on definitions
· Build data systems e.g. private co-financing data
· Improve and standardise methods
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Ways forward
4 December 2014 Tracking private and public climate finance
OECD DAC Statistics on
Climate-related Development Finance [email protected]
http://oe.cd/Riomarkers
www.oecd.org/env/researchcollaborative
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Thank you
4 December 2014 Tracking private and public climate finance