Focus on OPIC and Ex-Im Bank's Use of Financial Instruments...
WRI’s “Climate Finance” series tackles a broad range of issues relevant to public contributors, intermediaries, and recipients of climate finance—that is, financial flows to developing countries to mitigate greenhouse gas emissions and adapt to climate change impacts. A subset of this series,...
The last in a series of expert workshops and consultations under the UNFCCC’s work-programme on long-term finance concluded late yesterday. This 2013 extended work programme on long-term climate finance is designed to “identify pathways for mobilizing the scaling up of climate finance to USD 100 billion per year by 2020 from public, private, and alternative sources” and inform “enabling environments and policy frameworks to facilitate the mobilization and effective deployment of climate finance in developing countries.”I had the opportunity to participate quite actively in this year’s series, as WRI is working with co-chairs from the Philippines and Sweden to facilitate discussions on how to mobilize scaled-up finance for climate action.
Norway is one of the largest contributors to climate finance in the world, relative to the size of its economy. In 2010 and 2011, the majority of Norway’s fast-start finance (FSF) was channeled through multilateral institutions and supported mitigation activities in developing countries, with a...
by Taryn Fransen, Thorvald Moe, Steffen Kallbekken, Alice Caravani and Smita Nakhooda - August 2013
On July 16, 2013 the World Bank agreed to support universal access to reliable modern energy and limit the financing of coal-fired power plants to rare circumstances in an effort to address climate change concerns.
Tracking these funds and ensuring that they are delivered effectively is a huge undertaking. Developed countries report their climate finance contributions in periodic national communications submitted to the UNFCCC. However, because countries use multiple methods for reporting and often provide insufficient information, the data gathered are of limited use.
WRI was one of the first organizations to emphasize the importance of transparency of climate finance as part of any new international climate agreement. In the lead up to the UNFCCC conference in Cancun, held in December 2010, our climate team assessed existing finance reporting systems, provided specific guidelines for improvement, and put forward a common reporting format. The team then helped mobilize coalitions to secure support. The result was a mandate at Cancun calling for revised and enhanced reporting guidelines. If fully implemented, these will help donors and recipients better assess and understand the flow and effectiveness of climate finance, and ensure its alignment with other development priorities.
WRI remains active in the UNFCCC process because we believe all nations must act to reduce their greenhouse gas emissions if we are to contain rising temperatures within the limits to which humanity can adapt. Our work on climate finance and in other key policy areas is making a difference in the international climate negotiations.
While reactions to President Obama’s newly announced climate plan have focused on domestic action, the plan actually has potentially significant repercussions for the rest of the world. These repercussions will come in part through his commitment to limit U.S. investments in new coal-fired power plants overseas. If fully implemented, the plan will help ensure that the U.S. government channels its international investments away from fossil fuels and toward clean energy. The move sends a powerful signal—and hopefully, will inspire similar action by other global lenders.
Stabilizing the global climate is one of the most urgent challenges in coming decades. Our warming world affects all people and ecosystems, particularly the poor who already suffer disproportionately from climate-change impacts.
Sven Harmeling, Takeshi Kuramochi, and Steffen Kalbekken also contributed to this post.
How are we going to deliver climate finance at a sufficient scale to help developing countries mitigate and adapt to climate change? Parties to the UNFCCC--including those at this month’s intersessional in Bonn--are struggling to agree on the answer to this question. The UNFCCC established a Standing Committee on Climate Finance to take stock of global progress towards this goal, while a work program on Long-Term Finance will continue this year.
As these various groups debate the future of climate finance, it’s important to look back at progress and trends thus far. The fast-start finance (FSF) period offers important insights into how different developed countries are approaching the challenge of delivering international climate finance. These lessons can inform future efforts.
Major Insights from the Fast-Start Finance Period
Developed countries report that they delivered more than $33 billion in FSF between 2010 and 2012, exceeding the pledges they made at COP 15 in Copenhagen in 2009. But how much of this finance is new and additional? How has it been allocated, and what is it supporting?