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WRI Launches Project on Climate Finance and the Private Sector

The Intergovernmental Panel on Climate Change (IPCC) estimates that our best chance of containing global temperature rise to 2°C is to keep atmospheric concentration of carbon dioxide below 450 parts per million (we’re currently at 390 ppm). In addition to several other climate mitigation strategies, sticking to this cap will require significant new investment in low-carbon infrastructure and activities in developing countries.

Experts estimate the cost of funding this development to be about $300 billion annually by 2020, growing to $500 billion by 2030. The problem is, there’s a huge funding gap when it comes to meeting these costs—industrialized nations have only committed to mobilize $100 billion of new funds annually by 2020 to meet these needs. The world will need to figure out a way to come up with the rest of the funding if we’re going to prevent developing nations from feeling climate change’s most severe impacts.

Introducing WRI’s Climate Finance and the Private Sector Project

Tapping into the private sector is one way to bridge the climate finance funding gap. The World Resources Institute’s new Climate Finance and the Private Sector (CFPS) initiative has been designed to specifically address how the public sector can leverage private investment in a low-carbon future.

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The Green Climate Fund Board Meeting: Highs, Lows, and a Host Country

The Green Climate Fund (GCF) Board wrapped up its second meeting on Saturday with a major decision: selecting Songdo City in South Korea to host the Fund. The decision, which was adopted by consensus of the Board, was greeted with joy by the Koreans, who spared no effort to provide an offer of the highest quality to earn the confidence of the Board. The UNFCCC Conference of Parties will have to endorse this decision at its next meeting in Doha later this year to confirm the selection.

The Host Country Will Play an Important Role

The GCF is expected to be instrumental in distributing the funds that will help developing nations adapt to and mitigate climate change. As the host country, South Korea now has the opportunity to play an important role in ensuring that the GCF fulfills this responsibility.

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Why Is Choosing a Host Country for the Green Climate Fund Such an Important Decision?

The second meeting of the Green Climate Fund (GCF), the institution that’s expected to become the main global fund for climate change finance, will take place tomorrow in Songdo, Korea. While the Board will discuss several issues—everything from criteria for its executive director to hammering out a work plan—one is likely to take center stage: choosing the Fund’s host country.

Six countries are currently vying for the role: Germany (Bonn), Korea (Songdo), Mexico (Mexico City), Namibia (Windhoek), Poland (Warsaw), and Switzerland (Geneva). The decision is an important one—the appointed country will be tasked with providing a home for one of the main vehicles to help the world’s most vulnerable nations mitigate and adapt to climate change.

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Scaling Up Climate Finance: Why We Need to Invest in Institutions

Addressing global climate change requires huge investments. In order to keep global temperature rise below 2 degrees Celsius and protect vulnerable communities from climate change’s impacts, experts estimate that developing countries will need between $110 and $275 billion annually to mitigate and adapt to climate change. The International Energy Agency estimates that for developing countries to transition to low carbon energy, approximately $10 trillion dollars in energy investments by 2050 is required. In addition, another $ 1.5 trillion per year will be required by 2030 for adaptation action.

Unfortunately, there’s a huge gap between the funding we have and the funding we need: According to experts, developing countries’ climate change financing needs exceed current and prospective flows by at least five to 10 times. While many policy analysts focus on the need for more money and a greater availability of technology to bridge this gap, there’s another issue that’s less talked about but equally important: investing in institutions and capacity development.

By “institutions,” I mean countries’ national structures, mechanisms, and related arrangements to effectively implement climate policy and administer climate finance, such as a national climate change commission, an inter-agency committee on climate change, a national climate change adaptation fund, or national climate change trust funds. “Investing” in these institutions means creating the necessary policy, institutional, industry, and financial conditions that can help scale up investments in climate action. Building these strong and effective institutions will also require capacity and knowledge-building.

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WRI Annual Report 2011-2012

2011/2012 was a transition period as WRI said goodbye to President Jonathan Lash and welcomed new President Andrew Steer. With ample wind in our sails from 18 years of Jonathan’s leadership, the Institute’s accomplishments—many captured in this report—reflect both the strength and versatility he...

Monitoring the Receipt of International Climate Finance by Developing Countries

Building the capacity of developing countries to monitor
climate finance received will ultimately require the modification, development, and adoption of tools, methods, and
processes. This paper explores the challenges faced by Indonesia, the Philippines, and Vietnam in monitoring...

Progress Made at Bangkok Climate Negotiations, but Is it Enough?

It’s a long way from Bonn to Bangkok—literally and figuratively. It would be a great understatement to suggest that the June session of the UN climate talks in Bonn, Germany were acrimonious. In Bonn, governments spent the week arguing about procedural issues such as the nomination of chairs and the finalization of agendas. At the Bangkok negotiations that took place this past week, they argued over substance instead.

These arguments actually represent progress. Because the 50-plus issues under negotiation are contentious and have real impacts on national interests, they are deserving of robust debate. But we still have a long way to travel to get to Doha, Qatar, the location of the United Nations Framework Convention on Climate Change’s (UNFCCC) COP 18 summit, which takes place this November. Significant differences of opinion persist on each of the three key issues identified in our pre-Bangkok blog post:

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Improved Governance Needed in G20's Report on Infrastructure Development

A few months back, I attended the US-China-Brazil Forum on Sustainable Infrastructure and Development, organized by the International Fund for China’s Environment. I was joined by a few other development experts, including representatives from the Institute for Governance and Sustainable Development, Pacific Environment, the Brookings Institution, and the Heinrich Böll Foundation of North America. Our “Infrastructure Investment Strategies and Project Selection Criteria” panel provided an opportunity to discuss the final report of the G20 High-Level Panel (HLP) on infrastructure.

The HLP report, “High Level Panel on Infrastructure Recommendations to G20-Final Report,” acts as a guide for infrastructure project selection in the developing world. While the report successfully draws attention to the important topic of infrastructure development in developing countries, it has been criticized by civil society groups for failing to include effective governance strategies and for focusing too much on large-scale projects.

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What's Next for the Green Climate Fund?

This past week, the board of the Green Climate Fund (GCF) met for the first time. This was an important milestone around the goal of increasing financial support to help developing countries mitigate and adapt to climate change. Expectations are high for the Fund, officially established at the 2011 Durban climate talks. It’s positioned to become the main global channel for climate finance, expected to reach $100 billion per year by 2020.

Sentiments from Last Week’s Meetings

There was an atmosphere of excitement at last week’s meetings in Geneva, which brought together a group of 24-countries and their alternates, charged with improving the mobilization of climate finance. The meeting itself focused largely on procedural actions, including the election of the two co-chairs.

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Glossary of Financing Instruments

This document provides a glossary of financing instruments and the mechanism of these instruments. These definitions may serve as a useful reference for public sector decision-makers evaluating the broad toolkit
of options available to support private sector climate change mitigation...

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