Topic: multilateral development banks

Striking the Balance: Ownership and Accountability in Social and Environmental Safeguards

Sarah Parsons — Thu, 11 Apr 2013 15:05:46 -0400

Executive Summary

Many governments around the world have put in place systems to help ensure that investments in changes such as infrastructure projects, government programs or new national laws do not bring undue harm to their citizens or environment. The effectiveness of these systems in successfully preventing negative impacts varies widely. Developing countries tend to have a particularly difficult time ensuring that investments within their borders meet minimum social and environmental standards. As a result, many financial institutions have established their own policies to help ensure that their investments do not result in harm to vulnerable communities or ecosystems. These policies are generally known as “safeguards.” Although safeguard policies provide vital protection against risks to people and the environment, properly designing and implementing these policies means navigating complex relationships between financial institutions, governments, and the citizens of recipient countries.

The World Bank (the Bank) has been at the forefront among multilateral development banks in developing safeguard policies. In recent decades, the Bank has experimented with different approaches to social and environmental protection. These approaches respond in part to variations in the way in which countries receive money from the Bank, such as investments in projects versus policies. They have also emerged in reaction to the changing global landscape. Some developing countries have become richer and created stronger systems to protect people and the environment. The global community has also realized the value of letting developing countries define their own development path. At the same time, the pressing need to protect our global common goods and most vulnerable communities has become more apparent.

This working paper seeks to help the Bank and other financial institutions take stock of experiences to date and distill lessons for the future. We look at four different approaches to protecting against social and environmental harm: the traditional safeguards approach, which applies to most project lending; the Use of Country Systems approach, which the Bank has applied to some project lending on a pilot basis; the approach used for Program for Results investments, which applies to the Bank’s results-based lending pilot; and the approach used for Development Policy Loans, which applies to loans that support changes to policies and institutions.

While all four of these approaches rely on the rules and institutions of the recipient country, they do so to different degrees. Through an analysis of the strengths and weaknesses of each of approach, we arrive at seven lessons for the World Bank and other financial institutions looking to balance ownership and accountabil¬ity in their social and environmental policies:

Building on country safeguard systems can enhance ownership and incentives for safeguard implementation.
Minimum standards and positive incentives can clarify requirements and encourage countries to strive toward more ambitious social and environmental goals.
Safeguard implementation requires anticipating risks, planning to deal with those risks, managing and monitoring implementation, and responding to harm.
Proper safeguard implementation requires people on the ground to engage, collaborate and problem solve.
Recipient country safeguard systems still need support.
Citizens play a key role in any effective safeguard system.
To successfully balance ownership and accountability, safeguard approaches need to recognize differences among countries, sectors, and projects.

Survey of Public Financing Institutions' Use of Instruments

Sarah Parsons — Tue, 12 Mar 2013 20:28:14 -0400

This document is drawn from Appendix I in WRI’s working paper, Public Financing Instruments to Leverage Private Capital for Climate-Relevant Investment: Focus on Multilateral Agencies. It maps the types of financial instruments used by various development financial institutions, export credit agencies, and climate funds to support their operations. This listing 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 and adaptation projects in developing countries.

Public Financing Instruments to Leverage Private Capital for Climate-Relevant Investment: Focus on Multilateral Agencies is part of WRI’s Climate Finance series, which tackles a broad range of issues relevant to public contributors, intermediaries, and recipients of climate finance—that is, financial flows to mitigate greenhouse gas emissions and adapt to climate change impacts. A subset of this series examines how different types of public climate finance providers and intermediaries–or international finance entities like the proposed Green Climate Fund–can meet the significant investment needs of developing countries by mobilizing private sector investment. This subset focuses on how the public sector can finance and mobilize private sector investment and acknowledges the importance of overarching support for complementary climate change policies that create attractive market conditions domestically.

Access other publications in this series.

ADVISORY: Mayor Bloomberg and World Bank President Kim Headline Transforming Transportation 2013

James Anderson — Wed, 16 Jan 2013 12:24:38 -0500

The Honorable Michael Bloomberg, Mayor of New York City, and Dr. Jim Yong Kim, President of the World Bank, are scheduled to headline a keynote session at the annual Transforming Transportation conference in Washington, D.C. The session on “Shaping the Future of Urban Transport” aims to galvanize awareness of challenges facing cities and urban transport, share examples and solutions from the World Bank, New York City/Bloomberg Philanthropies, and the World Resources Institute.

The conference is being hosted jointly by EMBARQ—the World Resource Institute’s center for sustainable transport and the World Bank. This is the 10th annual Transforming Transportation, which aims to scale-up and advance the adoption of sustainable solutions in transport and urbanization around the world.

The session will also include remarks by Dr. Andrew Steer, President and CEO, World Resources Institute, and Ms. Rachel Kyte, Vice President for Sustainable Development, World Bank. The session will be moderated by Zanny Minton Beddoes, The Economist’s Economics Editor based in Washington D.C.

The session will focus on the urban challenges in the U.S. and around the globe. Cities everywhere are under increased pressure from rapid population growth, exacerbated by climate change and extreme weather events, such as Hurricane Sandy. Increased motorization is also resulting in negative externalities such as congestion, emissions, and road fatalities. The conference will explore how scaling up sustainable transport will bring the smart solutions to the diverse set of challenges that cities are facing.

WHAT:
Plenary Session with Mayor Michael Bloomberg, Mayor of New York; Dr. Jim Kim, President, World Bank; Andrew Steer, President, World Resources Institute; Ms. Rachel Kyte, Vice President for Sustainable Development, World Bank.

WHEN:
Friday, January 18, 2013

TIME:
9:00 to 10:00 a.m. ET
Note: Registered media should arrive by 08:30 a.m. in order to sign in.

PLACE:
Preston Auditorium
World Bank Headquarters
1818 H Street, NW
Washington, DC

The event will be live streamed. Check “Watch Live” at TransformingTransportation.org

NOTE: Media must register for this event to Alexis O’Brien at aobrien@worldbank.org or tel. (202) 473-2409

For more information, please contact:
Michael Oko, moko@wri.org; (202) 729-7684 (WRI)

WRI’s website: www.wri.org
EMBARQ website: www.EMBARQ.org
Conference website: http://TransformingTransportation.org
Twitter hashtag: #TTDC

Public Financing Instruments to Leverage Private Capital for Climate-Relevant Investment: Focus on Multilateral Agencies

Sarah Parsons — Thu, 06 Dec 2012 10:12:49 -0500

Executive Summary

As private sector investment flows within and into developing countries rapidly increase, the public sector has a unique opportunity to ensure that these flows are directed to meet critical climate change investment needs. This paper informs the use of public funds to leverage private sector investment in climate-relevant projects. It focuses on the public sector’s use of financing instruments, which can help improve the risk-reward profile of climate-relevant projects, especially when combined with a foundation of complementary climate change policies and financial regulations.

This paper draws on the experiences of two types of multilateral institutions responsible for providing or intermediating finance to climate change projects in developing countries: (1) climate funds and (2) development banks. It maps the financing instruments available to various public actors, with a focus on three significant institutions: the Global Environment Facility, the Clean Technology Fund, and the World Bank Group. Future working papers will map the activities of other public institutions, including bilateral, national, and regional development banks; government agencies; and public-private partnership funds.

The results of these working papers will be aggregated into detailed analyses and recommendations that inform the future public provision of climate finance with respect to leveraging private capital.

Findings from this paper for public actors and international mechanisms, like the Green Climate Fund, include the need to:

1. Better tailor the use of public financing instruments and maximize flexibility in the use of these instruments. This includes:

Expanding the use of financing instruments beyond loans to equity and guarantees in order to mitigate specific risks faced by the private sector in different geographies.
Coordinating support for domestic climate change policies and robust financial markets with project finance.
Targeting grant support to markets where access to finance is most challenging and where public finance is instrumental in market development. This includes grant finance to poorer countries with less robust financial markets, as well as for new technologies that cannot achieve commercial returns without initial public support.
Capitalizing international mechanisms like the Green Climate Fund in a manner that allows maximum flexibility in the use of different financing instruments. Specifically, the governments of developed countries should consider providing a reasonable amount of grant funding to the Green Climate Fund and its Private Sector Facility to ensure that a suite of instruments can be used flexibly as needed to most effectively mobilize investments. Loans, equity, de-risking instruments, or investments in other funds will provide a suite of products for the Fund to most effectively leverage private capital in ways that are most appropriate for individual programs or projects.

2. Address internal, institutional barriers to private sector investment; for example, by:

Improving internal coordination and cooperation with the aim of offering a complementary suite of financing options for, or to attract private sector investment into, projects.
Instituting incentives for employees to proactively consider options to increase private sector participation in projects, while maintaining appropriate checks to ensure that private sector activities are not unnecessarily subsidized.
Streamlining fee structures and transaction processing times for all products, but particularly non-loan, non-grant instruments.
Improving tracking and monitoring systems, as well as data transparency and availability to better identify and incorporate best practices in leveraging private capital.
Familiarizing recipient governments with more complex instruments, like guarantees, to enable them to use such instruments when appropriate.

STATEMENT: Development Banks Announce "Game Changer" for Sustainable Transport at Rio+20

Lauren Zelin — Tue, 19 Jun 2012 23:38:38 -0400

The world’s largest multi-lateral development banks — led by the Asian Development Bank, the World Bank, and others — committed to provide more than $175 billion over 10 years to support sustainable transport in developing countries.

The announcement was made at the UN Sustainable Development Conference in Rio de Janeiro (Rio+20) by the African Development Bank, Asian Development Bank, CAF- Development Bank of Latin America, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, Islamic Development Bank, and the World Bank.

Following is a statement from Holger Dalkmann, director of EMBARQ, the World Resources Institute’s center for sustainable transport:

“This is a game changer for sustainable transport. It will ensure that hundreds of millions of people will have cleaner air, less congested roads, and safer transportation.

“Ten years ago transportation wasn’t even in the discussion; now it’s a major outcome from the world’s preeminent conference on sustainable development.

“Banks are putting their money where it matters — on streets built for people, not just cars. The world’s population is expected to surpass 9 billion by 2050, with more than half living in Asia, mostly in urban areas. At the same time, the rate of vehicle ownership is predicted to skyrocket from around 800 million cars a decade ago to around 2 billion in 2030. These two mega-trends are coming together to create an environment where people must compete for financial, institutional, and physical resources. In response, we need better urban designs; more sustainable transportation modes, like walking, biking and mass transit; and improvements in existing vehicle and fuel technology.

“This investment is not just about improving the way people move from point A to point B; it’s also about providing access and mobility for the poor and improving road safety, not to mention reducing transport-related greenhouse gas emissions. Transport is no small piece of the climate change pie: the sector represents approximately one-quarter of global CO2 emissions.

“Today’s announcement will no doubt encourage other decision-makers, especially national governments, to consider financing transport projects based on social and environmental benefits. It will push sustainability into the core of urban development.

“At the same time, we need to make sure that the money gets invested into the right kind of projects, and that there are sound mechanisms to measure its impact. This will require full transparency and independent monitoring.

“Countries often invest in transportation and infrastructure, but much of that goes into highways. We need to be smarter about where money flows, whether that means creating vibrant public spaces, providing safer infrastructure for pedestrians and cyclists, or building high-tech, low-cost transit systems. Doing this would be a paradigm shift in the way we finance the growth of sustainable cities, similar to what the Asian Development Bank has done with its Sustainable Transport Initiative, a lending and technical assistance program for transport projects in Asia and the Pacific that emphasizes inclusive economic and environmentally sustainable growth.

“EMBARQ, the World Resources Institute’s center for sustainable transport, is a founding member of the Partnership on Sustainable Low Carbon Transport, which helped to catalyze this new financial commitment by the banks.

“Years from now, we may look back at Rio+20 as the moment when transport was pushed to the top of the sustainability agenda.”

-ENDS-

For more information on EMBARQ, visit: www.embarq.org.

Note: To schedule an interview, contact: Michael Oko, moko@wri.org.

Ecosystem Services Review for Impact Assessment

Maggie Barron — Tue, 15 Nov 2011 15:30:06 -0500

Overview

Lending and government institutions, such as the International Finance Corporation and the US Council on Environmental Quality, now require the explicit consideration of ecosystem services in impact assessment.

Overview
Downloads
Get Involved
Timeline

More Information for Practitioners

Conceptual Framework
Why Use the Ecosystems Services Review for Impact Assessments?
Ecosystem Services Requirements in new IFC Performance Standards

However, according to a survey carried out by WRI, the guidance documents currently available for addressing ecosystem services in Environmental and Social Impact Assessment (ESIA) are seen by practitioners as insufficiently detailed to move ESIA practices forward.

To fill this gap in practical guidance, the Ecosystem Services Review for Impact Assessment (ESR for IA) provides: (1) A conceptual framework of how the project, ecosystem services and human well-being are linked and (2) step-by-step instructions (PDF, 172 Kb) to systematically incorporate ecosystem services

Downloads

Working Paper 1 - Ecosystem Services Review for Impact Assessment: Introduction and Guide to Scoping (PDF, 1.1 Mb)
Impact Scoping Tool (Excel, 5.7 Mb)
Dependence Scoping Tool (Excel, 2.1 Mb)
Seven Steps to Address Ecosystem Services in Impact Assessment (PDF, 172 Kb)

Get Involved

We invite you to send us feedback and suggested improvements to the methodology.

Complete our survey. Practitioners are invited to share their feedback on the ESR for IA through this short online survey. The authors would like your opinion on the overall ESR for IA framework and your suggestions for improving the guidance.
Join our LinkedIn discussion. The authors are leading a guided discussion on the ESR for IA with the Business & Ecosystem Services Professionals group, which links managers, consultants, and thought leaders around pressing issues at the nexus of business and ecosystems. The forum allows members to share recent news and best practices, discuss important issues, and connect with peers.
Road-test the ESR for IA. From December 2012 to December 2013, the authors will work with selected project developers and impact assessment practitioners to road-test the ESR for IA on actual ESIA processes. This opportunity is ideal for environmental and social practitioners who work for companies that wish to identify more effective ways to mitigate negative impacts on ecosystem services, meet the new IFC Performance Standards, or establish themselves as leaders in addressing ecosystem services in environmental and social impact assessment. If you would like your project to be considered for road-testing, contact Florence Landsberg with a short description of the project and the planned ESIA timeline.
Contact us. You are also invited to share your general feedback on the ESR for IA directly with the authors.

Timeline

The ESR for IA will be presented in two successive working papers (WP): Ecosystem Services Review for Impact Assessment: Introduction and Guide to Scoping (available above) and Complementing Environmental and Social Impact Assessment to Address Ecosystem Services: The Ecosystem Services Review for Impact Assessment. WP 2 is due in the first quarter of 2013. It will provide a revised version of WP 1 and instructions to conduct the ESR for IA at the Impact Analysis and Mitigation Stages. It will also incorporate the comments from six retrospective road-tests (i.e. implementation of the ESR for IA on completed ESIAs).

Conceptual Framework

The ESR for IA’s conceptual framework builds on the elements and causal relations of the original Millennium Ecosystem Assessment (MA) Framework (Figure 1). By explicitly recognizing the causal interactions between the project, human well-being and the indirect and direct drivers of ecosystem change, the ESR for IA framework supports an integrated assessment of elements commonly assessed separately in an ESIA.

Figure 1: Conceptual framework for assessing project impact and dependence on ecosystem services (Click to Enlarge)

Why Use the Ecosystems Services Review for Impact Assessments?

The ESR for IA helps social and environmental impact assessment practitioners deliver the following:

Systematic integration of environmental and socio-economic issues.
Assessment of project dependence on ecosystem services.
Consideration of multi-scale impacts and dependence.
Identification of indirect and cumulative impacts.
Identification, communication, and negotiation with stakeholders.
Comply with the new International Finance Corporation (IFC) performance standards.

Ecosystem Services Requirements in new IFC Performance Standards

Starting January 2012, IFC investments will be screened systematically for ecosystem service risks and impacts, which are mandated in multiple performance standards. These ecosystem service changes to the IFC standards are comprehensive and affect screening, mitigation, and compensation rules for future investments. They also include increased resources to strengthen IFC’s internal management capacity to assess ecosystem service risks and impacts. These additions to the performance standards complement existing requirements for safeguarding biodiversity and supporting sustainable natural resources management to reflect the importance of the environment for people’s health, culture and fundamental human rights.

The new standards include the following specific ecosystem services requirements:

Performance Standard 1-Assessment and Management of Environmental and Social Risks and Impacts – Identify all reasonably expected risks and impacts related to ecosystem services and use a broader definition of a project’s area of influence, which now includes indirect project impact on ecosystem services upon which Affected Communities’ livelihoods are dependent.
Performance Standard 4-Community Health, Safety, and Security – Assess and manage health, safety, and security risks to communities resulting from direct project impact on provisioning and regulating ecosystem services such as the loss of buffer areas (e.g., wetlands, mangroves, or upland forests.
Performance Standards 5-Land Acquisition and Involuntary Resettlement – Assess impacts on and compensate for loss of provisioning ecosystem services resulting from land acquisition and involuntary resettlement.
Performance Standard 6-Biodiversity Conservation and Sustainable Management of Living Natural Resources – Carry out a systematic review (including participation of Affected Communities) of all ecosystem services a project will impact or is dependent upon to identify priority ecosystem services, and avoid, minimize, and mitigate impacts on priority ecosystem services for which a client has direct management control or significant influence.
Performance Standard 7-Indigenous Peoples – Assess provisioning and cultural ecosystem services when examining projects affecting Indigenous Peoples.
Performance Standard 8-Cultural Heritage – Maintain or restore any ecosystem processes and ecosystem services when replicable cultural heritage is removed.

WRI Experts on Asia's Clean Energy Future

Maggie Barron — Thu, 16 Jun 2011 10:44:50 -0400

Why is Asia such an important region for clean energy deployment? WRI experts respond.

From June 22-24, the Asian Development Bank (ADB), the U.S. Agency for International Development (USAID) and the World Resources Institute (WRI) will co-host the premiere knowledge-sharing platform for clean energy investment in Asia, the 6th Asia Clean Energy Forum (ACEF). Taking place in Manila, Philippines, the event brings together energy leaders from around the world to discuss clean energy policy, regulation, financing and innovative business models.

I sat down with WRI experts who will attend the events in Manila and asked each of them, what is unique about Asia’s path to low-carbon development?

Opportunities of a Low-Carbon Economy

Large and small countries in Asia understand the opportunities of a low-carbon economy. We’re seeing these countries transition rapidly to renewable energy, and in doing so driving global markets. China, for instance, is leading the world in renewable energy investment, and others are looking to follow its lead. These successes may help drive even greater ambition among Asian countries, allowing countries to reap the economic, environmental and development benefits of a low-carbon economy.

— Jennifer Morgan, Director, Climate and Energy Program

Global Leadership and Innovation

The low-carbon transformation will be very different from technological transformations of the past because many of the innovations will come from developing countries, in particular countries from Asia.

These are the countries making large scale investments in energy infrastructure. They are transforming their economies to be competitive participants in the global clean energy value chain, as they make the transition from low cost, low skill manufacturing to high skill, high value-added manufacturing. They see the potential to become global leaders in the clean energy sector while meeting domestic energy challenges.

— Letha Tawney, Senior Associate, Two Degrees of Innovation

The Meaning of “Clean” Energy

Asia is home to a large proportion of the world’s poor, who either have no or very limited access to energy. And it’s also home to some serious gaps in governance. That’s why when we say “clean energy” we need to make sure we’re talking about both a type of fuel and an absence of corruption. There is no reason why vested interests will not become entrenched in the clean energy space, just as they have in the energy sector in the past.

So governments need to strive for more transparency, inclusive decision-making, and accountability. Business as usual will allow inefficiencies to continue, with little if any regulatory oversight.

Countries that exclude people from decisions about clean energy deployment run serious governance risks. To a farmer whose land is taken over without due process, it’s of very little consequence whether it’s for coal or for a solar PV plant. The governance challenges in the energy sector don’t go away just by calling it “clean.”

— Bharath Jairaj, Senior Associate, Electricity Governance Initiative

Scaling Up Smart Renewable Energy Policies

Asian countries are providing more and more examples of smart policies that lead to increased deployment of renewable energy in line with their broader development objectives. And they are learning from each other, instead of looking only to developed countries or international institutions for advice.

These countries can develop good models of what we refer to as “smart renewable energy policy”, but if they want to scale them up to the level that is necessary to meet the huge energy challenge Asia faces, they will need international financial support. For example, both India and Thailand pay guaranteed prices to renewable energy producers, paid for with a surcharge on electricity. They are supporting renewable energy with their own resources. Yet their resources are limited, so their support for renewables can only go so far. Donors need to step in, build on existing successes and help bring them to scale. A meeting like ACEF brings donor institutions and in-country experts together and provides an opportunity to form the partnerships necessary to expand on countries’ successes so far.

— Lutz Weischer, Research Analyst, Two Degrees of Innovation

A Role for Entrepreneurs

Entrepreneurs in Asia are taking on the issue of energy access. There’s a lot of talk about large solar installations, but those come with their own storage and distribution challenges – how are you going to expand the grid to get that solar energy to a remote village? That’s why there is so much potential for decentralized clean energy, like solar lanterns, microhydro plants, and biomass gasification.

For the first time we’re starting to see a critical mass of companies that are selling these kinds of electricity products, and prices keep coming down. So it’s no longer an issue of technology, or price. It’s now about getting these technologies to consumers. That’s a really important shift, and entrepreneurs are coming up with creative solutions to tap into this very significant rural market.

— Saurabh Lall, Research Officer, New Ventures

Energy Efficiency Brings a Competitive Advantage

In Asia, there’s very real pressure for companies to invest in energy efficiency, both from governments and from large customers who want to squeeze carbon out of their supply chains.

So there’s this confluence of very strong policy drivers, very strong demand drivers, and industries that recognize the opportunity to gain a competitive advantage. These all create the conditions for a good market for energy efficiency technology.

The challenge now is that a lot of the low-hanging fruit for energy efficiency projects has already been achieved. The next step is for companies to make longer term investments, and for that many of them need external financing. If Asian countries can help companies address some of the financing and capacity barriers, they can jumpstart a lot of new technology and continue to drive costs down.

— Xiaoyu Shi, Associate, Climate & Energy Program

An Urgent Necessity

Right now Asia is at a crossroads. Energy demand in the region continues to grow rapidly and is expected to rise at a rate well above the global average. Asia must decide whether to meet this demand using traditional carbon-intensive technologies or switch to clean energy and enable the transition to a low-carbon economy.

Asian countries face serious threats from the potential impacts of climate change on their economies, their ecosystems and their people. This combined with rising prices for food and fossil fuels make the case for low-carbon future. This is no longer a matter of choice - it’s an urgent necessity. With Asia leading the charge on massive investments in wind, solar, biomass and geothermal, it has the opportunity to become a major hub for clean energy investments.

— Athena Ballesteros, Project Manager, International Financial Flows and Environment

Emerging Actors in Development Finance: A Closer Look at Chinese and Brazilian Overseas Investments

Xiaomei Tan — Tue, 07 Jun 2011 11:33:33 -0400

The landscape of development finance is changing rapidly. Traditionally, international financial flows moved from developed countries to developing countries. In the last decade, however, major emerging economies such as China and Brazil have fueled a growing trend of South-South development flows by increasingly channeling their overseas investments to other developing countries.

China and Brazil are surfacing as major international investors through nationally owned financial institutions such as the Export-Import Bank of China, the China Development Bank and the Brazilian Development Bank (BNDES). These “emerging actors” are financing major initiatives to acquire natural resources, open markets, and forge strategic political ties. They are increasingly financing large-scale, high impact projects beyond their borders—such as hydropower plants and gas pipelines—which may pose new challenges for environmental and social sustainability.

This preliminary research focuses on Chinese and Brazilian overseas investments and begins to look at the growth drivers and geographic trends of those investments.

Click to enlarge

Introduction

South-South financial flows are changing the nature of development finance and assistance. Between 2009 and 2010, two Chinese state-owned banks lent more money to other developing countries than the World Bank.¹ During the recent financial crisis, Brazil invested $10 billion in International Monetary Fund bonds, a striking example of the country’s transformation from a debtor to creditor.²

Expanding South-South trade and investment provides welcome and needed sources of capital for countries in Africa, Asia, and Latin America. At the same time, these financial flows – coupled with the emergence of powerful financial actors from China, India, Brazil, and other economies – may pose new challenges for environmental and social sustainability.

A New Geography of Growth

Click to enlarge

Relative shifts in economic power and political influence are reconfiguring the global context for sustainable development policy. We are currently witnessing what the Organisation for Economic Co-operation and Development (OECD) terms “the new geography of growth” – “a 20-year structural transformation of the global economy in which the world’s economic centre of gravity has moved towards the East and South.”

Trends indicate that developing economies will “account for 57% of world GDP [Gross Domestic Product] by 2030.”³ Despite sharp differences among members, the G-20 is supplanting the G-8 as the primary vehicle for global economic policy coordination.⁴ Large emerging market economies are defining their own approaches to development cooperation, governance issues, and environmental and social sustainability outside of many existing normative frameworks.

Click to enlarge

Expanding South-South Trade

South-South trade is clearly a dynamic force in the global economy. While world trade expanded four-fold between 1990-2008, South-South trade grew more than ten times. Developing countries now account for around 37% of global trade, with South-South flows making up about half of that total (19% of global trade).⁵ In 2009, for example, China surpassed the U.S. as Africa’s largest trading partner. Sino-Africa trade volumes exceeded $91 billion in 2009.⁶

China Goes Global

China’s decades-long rapid growth has made it the second largest economy in the world, surpassing Japan in mid-2010.⁷ A major factor contributing to China’s growth has been its integration into the global economy. China’s transformation from “isolated” to “globalized” is a direct result of the government’s desire to spur and maintain lasting growth of its economy.⁸

In 2001, China’s tenth Five-Year Plan (2001-2005) formalized the directive for Chinese companies to “Go Global,” a strategy to gain access to needed resources, stimulate the export of goods, and grow China’s multinational businesses and brands. Beijing has provided diplomatic support, favorable tax exemptions, insurance, and, critically, access to low-cost finance.

The “Go Global” strategy delivered quick results – China’s outward foreign direct investment (OFDI) flows increased from under $1 billion in 2000 to $57.9 billion in 2010, while its stock of OFDI grew from nearly $27 billion in 2000 to over $296 billion in 2010.⁹

As reported by the Chinese Ministry of Commerce (MOFCOM), China’s OFDI stock is largely concentrated in Asia, although investment has increased significantly in Latin America and Africa over the past five years. However, this figure assigns flows through the offshore centers solely to the corresponding region, leading to an overestimation of OFDI in Asia and Latin America. An assessment by the U.S.-based Heritage Foundation investigates these discrepancies. Whereas MOFCOM reports $7.8 billion in African OFDI, Heritage records $37.9 billion. Whereas MOFCOM designates Latin America as the second leading OFDI destination in 2008, Heritage ranks it behind all other regions, with significant investments in Europe, Oceania, the Middle East, and North America.¹⁰

Chinese Overseas Investment Banks

Chinese authorities have simplified regulations to facilitate investment abroad. Three governmental bodies – MOFCOM, SAFE, and the NDRC – have primary but not sole oversight of China’s overseas investment (separate from foreign assistance) regime. MOFCOM is responsible for developing regulations for outbound investment and for coordinating activities with commercial counselors posted at Chinese embassies. SAFE issued new regulations in 2009 that reduced qualification requirements for offshore foreign currency lending and expanded the sources of funds for lending (including access to government foreign exchange reserves).¹¹ The NDRC reviews large outbound investments to ensure they align with the country’s political interest and overall economic development policy.

In addition, CBRC and SASAC also play an oversight role. Risk management guidelines issued by the CBRC in 2008 opened the door for Chinese banks to provide loans for merger and acquisition purposes (previously forbidden under a 1996 regulation.) They require “banks to perform due diligence regarding compliance, operational, and commercial risks relating to the parties and the transaction.”¹² There is no mention of social and environmental risks.

Rather than seeking financing primarily through the capital markets, Chinese companies obtain 80-90% of their funding from Chinese banks.¹³ As part of the Go Global strategy, China’s state-owned policy banks, largely the Export-Import Bank of China (China Exim) and the China Development Bank (CDB), were mobilized to facilitate international capital flows and support mergers and acquisitions of foreign companies. Although not the largest in terms of total assets and domestic investment, China Exim Bank and CDB play the leading role in overseas investment. Other state-owned banks, such as the export and credit insurance company (Sinosure), have also contributed on a lesser scale.

China Export Import Bank

The Export-Import Bank of China (China Exim) was formed in 1994 along with two other “policy banks,” the China Development Bank and the Agricultural Development Bank of China, “as tools of the government, allowing Beijing to allocate preferential or targeted finance through a hybrid of planning and market means.”¹⁴ As a policy bank, China Exim finances and implements the government’s trade and overseas investment policies.¹⁵ The Bank is under the direct leadership of the State Council.

China Exim has exhibited phenomenal growth over the past decade. It has increased lending volumes by 30% to 40% year-on-year – an indicator of the accelerating nature of the “Go Global” strategy. China Exim is by far the largest export credit agency in the world. It approved over $70 billion in new lending in 2009, more than U.S. Exim, JBIC, and BNDES Exim combined.

Why is China Going Global?

Increasing demand for energy and natural resources is a major driver behind China’s foreign direct investments. In 2010, China was the world’s leading consumer of several major commodities including copper, steel, coal, lead and iron ore. As China’s economy experiences unprecedented growth, there is a growing need for new markets, technology, and brands.

Growing Investment in Africa

China’s investment position in Africa is accelerating rapidly, rising from an OFDI stock of less than $500 million in 2003 to $9.3 billion in 2009.¹⁶ Reportedly more than 7,900 Chinese enterprises are now established in Africa, with businesses ranging from home appliances, textiles, clothing, infrastructure, power generation, and natural resource extraction.¹⁷ Returns on investment by Chinese companies in Africa are reportedly higher than in other developing countries: from 24%-30% compared to between 16%-18%, according to the Ministry of Foreign Affairs.¹⁸

Africa as a region has increased its rather minor share of China’s total trade from 2% in 2001 to 4% in 2009.¹⁹ While China’s volume of trade with other regions is far more significant, the opposite is true for many African countries: China has become Africa’s largest export destination and the second largest source of imported goods. South Africa recently announced that it would prioritize China and India as these countries are now its biggest export markets.²⁰

Imports from Africa

The bulk of China’s imports from Africa originate from relatively few countries. While investments are spread across 48 African countries, over 70% of Chinese OFDI stock in 2008 was concentrated in five resource rich countries: South Africa, Nigeria, Zambia, Sudan, and Algeria.

However, by international comparison, China’s investments in Africa’s natural resources match well-established patterns. 50%-80% percent of all FDI to Africa goes to natural resource exploitation.²¹ Despite the rapid scale-up in Chinese investment in Africa, most foreign direct investment (FDI) in Africa originates from OECD countries – 91.6% of total inward FDI stock in Africa in 2008.²² Similarly, the bulk of U.S. imports from Africa are sourced from relatively few resource rich countries; 77% of total imports in 2009 came from five countries: Nigeria (30.5%), Algeria (17.3%), Angola (15%,) South Africa (9.2%), and Congo-B. (4.9%).²³ The top three African oil exporters – Nigeria, Angola, Algeria for the U.S. and Angola, Sudan, Libya for China – provided a quarter of each country’s total imports (27.6% or the U.S., 25.1% for China).

Resources-for-Infrastructure Deals

China has executed a number of resources-for-infrastructure deals in Africa in recent years, backed not just by oil but also bauxite, chromium, iron ore, and even cocoa. In these deals, China provides loans for infrastructure development, which are repaid by delivery or sales of the borrowing country’s natural resources. This structure is used most commonly when a country does not have the financial capacity to guarantee and/or service a loan commitment but has a natural resource (such as oil) to offer as repayment. This approach follows a long history of natural resource-based transactions and is far from unique to China.

Brazil Takes Off

Once the largest debtor among developing countries, Brazil has transformed its economy over the past two decades into a regional and, increasingly, global powerhouse. With the largest economy in South America, Brazil ranks ninth in the world in terms of GDP. In 2006 it became a net foreign investor (while still attracting significant inward flows).²⁴ It is a world leader in biofuels technology and a major agricultural producer.²⁵

Role of Brazilian Financial Institutions

BNDES – originally Banco Nacional de Desenvolvimento Economico e Social (National Bank for Economic and Social Development) but rebranded as “El banco de desarrollo de Brasil,” (“The Brazilian Development Bank”) – is a wholly owned federal government company.²⁶ It is the largest provider of funding for capital investment in Brazil. As a key source for long-term financing and subsidized interest rates, the bank is normally responsible for almost 20% of total credit granted by Brazilian banks to the private sector.

In 2009, BNDES estimates that it provided nearly 40% of financing for all investments in Brazilian manufacturing and infrastructure.²⁷ BNDES provides direct credit, fund distribution through financial intermediaries, and equity investment. It also provides grants for social, cultural, and technological development. With total assets of $285 billion (as of September 2010), BNDES is Brazil’s fourth largest bank.

While Brazilian firms began to invest abroad in the 1980s, the “internationalization of Brazilian companies is a relatively recent phenomenon. From 2000 to 2003, OFDI averaged $0.7 billion a year. Over the four-year period 2004-2008, this average jumped to nearly $14 billion. In 2008, when global FDI inflows were estimated to have fallen by 15%, OFDI from Brazil almost tripled, increasing from just over $7 billion in 2007 to nearly $21 billion in 2008. An estimated 887 Brazilian companies have invested abroad in 78 countries.”²⁸

Not only did China displace the U.S. as Brazil’s biggest trade partner in 2009, but it was also Brazil’s largest foreign investor, investing in a wide range of areas, from iron ore mines to vast tracts of farmland and the electricity grid.

China and Brazil: A Strategic Partnership?

In April 2010 Brazil and China pledged to foster their “strategic partnership,” signing a range of agreements including a 2010-2014 Joint Action Plan to deepen bilateral relations.²⁹ President Lula stated that the agreements come on top of “spectacular” growth in bilateral trade of “780 percent since the beginning of my administration” in 2003, reaching $36 billion in 2009 in spite of the global economic crisis, making China Brazil’s largest trading partner.³⁰ However, this trade is highly asymmetric. “Whereas Brazilian exports are concentrated mostly on soy and iron ore, Chinese sales cover a wide range of industrial goods, from electronic equipment, machinery, shoes, textile and garments. Moreover, Brazil accounts for less than one percent of the total Chinese exports, whereas the Asian country is the destination of around 10 percent of Brazilian exports. The Chinese state company Sinopec is now the largest buyer of Brazilian oil, importing 200,000 barrels per day.”³¹

China and Brazil seek similar relationships with Africa, sharing a strong proclivity to oil and mining activities. China’s trade and investment relationship with Africa, however, is far more diverse than Brazil’s, encompassing energy, manufacturing, retail and agriculture in addition to oil and mining. This makes it less likely that the two countries will compete over investment opportunities. A key challenge is to ensure these trade flows result in clear benefits to the host government and local communities, and safeguard the environment.

WRI’s Work

With our record of independent research, our experience convening a wide range of stakeholders, and our close partnerships with organizations in China, Brazil, and several host countries in Africa and Asia, WRI’s International Financial Flows and the Environment (IFFE) initiative supports efforts by both investors and host countries to move towards environmentally and socially responsible development.

IFFE works to help these countries to apply the highest climate change, environmental and social standards to their investment overseas, report publicly on these standards, and respond to the concerns of NGOs and local communities.

For additional information on WRI’s Emerging Actors in Development Finance work, contact WRI Senior Associate Xiaomei Tan xtan@wri.org.

Note: All currencies are quotes in U.S. dollars unless otherwise stated.

This collection of figures and charts is based on preliminary research conducted by Bruce Jenkins, WRI consultant, and Xiaomei Tan, WRI Senior Associate. The scoping research concluded in April 2011 and includes data from various sources that are updated frequently. The data is circulated to stimulate timely discussion and critical feedback and to influence ongoing debate on emerging issues. WRI has not verified the data, and figures and charts are meant to be used for illustrative purposes. WRI will continue to update the data as our research moves forward.

CDB and China Exim “signed loans of at least $110bn (£70bn) to other developing country governments and companies in 2009 and 2010, according to Financial Times research. The equivalent arms of the World Bank [IBRD and IFC, not IDA] made loan commitments of $100.3bn from mid-2008 to mid-2010, itself a record amount of lending in response to the financial crisis.” Dyer, Geoff, Jamil Anderlini, and Henny Sender, “China’s lending hits new heights,” Financial Times, January 17, 2010. See also, http://www.bbc.co.uk/news/world-asia-pacific-12212936. ↩
BBC, “Brazil to make $10bn loan to IMF,” June 11, 2009, at http://news.bbc.co.uk/2/hi/8094402.stm, and IMF, “IMF Signs $10 Billion Note Purchase Agreement with Brazil,” January 22, 2010, at http://www.imf.org/external/np/sec/pr/2010/pr1014.htm. ↩
OECD Development Centre, Perspectives on Global Development 2010 – Shifting Wealth (Paris: OECD, 2010), pp. 3, 13, 15, at http://www.oecd.org/document/8/0,3343,en_2649_33959_45462088_1_1_1_1,00.html. ↩
Formed in 1999, the G-20 is comprised of 19 countries plus the European Union: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, Republic of Korea, Turkey, the UK, and the US (http://www.g20.org.) For critiques of recent G-20 meetings, see Jeffery Garten, “The G-20 and the Future of Capitalism – Part 1,” Jonathan Fenby, “The G-20’s Uncertain Roadmap,” and David Shaumbaugh, “Beijing: A Global Leader with a ‘China First’ Policy,” at http://yaleglobal.yale.edu. ↩
OECD, Shifting Wealth, pp. 18, 71. ↩
Ministry of Commerce. 2010. China-Africa Trade and Economic Relationship Annual Report. ↩
Barboza, David, “China passes Japan as Second-Largest Economy,” The New York Times, August 15, 2010, at http://www.nytimes.com/2010/08/16/business/global/16yuan.html?scp=18&sq=china&st=cse. ↩
Zhang, Yongjin, “China Goes Global,” (London: Foreign Policy Centre, 2005), p. xi, at http://fpc.org.uk/fsblob/449.pdf. ↩
Ministry of Commerce People’s Republic of China (MOFCOM). Statistics on China’s Overseas Investment. At http://www.mofcom.gov.cn/tongjiziliao/tongjiziliao.html. April 2011. ↩
Heritage Foundation, “China Global Investment Tracker,” at http://www.heritage.org/research/reports/2010/02/china-global-investment-tracker-2010. ↩
SAFE issued the Notice on Certain Issues Relating to Foreign Exchange Administration on Offshore Lending by Domestic Enterprises in June 2009. See “China Insights,” p. 3. ↩
“China Insights,” p. 4. ↩
Motoko Aizawa presentation, “China’s Green Credit Policy: Building Sustainability in the Financial Sector China Environment Forum” February 24, 2011, Woodrow Wilson International Center for Scholars, available online: http://www.wilsoncenter.org/events/docs/Motoko%20Aizawa.pdf ↩
Brautigam, The Dragon’s Gift, pp. 79-80. ↩
The Export-Import Bank of China website, at http://english.eximbank.gov.cn/profile/intro.shtml. ↩
OECD. Chinese FDI into Africa – major dynamics and trends. April 29th 2011. ↩
21st Century Business Herald, “China to Explore Credit Rating in Africa,” June 13, 2010, at http://www.focac.org/eng/zfgx/dfzc/t710365.htm. ↩
Noted in article in People’s Daily, “Sinohydro Group boosts African stakes,” October 21, 2010, at http://english.peopledaily.com.cn/90001/90778/90860/7172393.html. ↩
Calculated from COMTRADE data compiled by Trade Law Center for Southern Africa (TRALAC) China-Africa trade data 2010 at http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news&cat=1044&cause_id=1694#china. ↩
“SA to focus on its new biggest export markets China, India,” Business Day, September 15, 2010, posted at http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&news_id=92926&cause_id=1694. ↩
OECD, China – Encouraging Responsible Business conduct, OECD Investment Policy Review (Paris: OECD, 2008), p. 110. ↩
UNCTAD, Economic Development in Africa Report 2010, p. 79 ↩
Author’s calculations from COMTRADE data provided by International Trade Centre, Trade Map. ↩
Casas-Zamora, Kevin, “Brazil: Poster Boy of Globalization Charts Own Course,” YaleGlobal, April 9, 2010, at http://yaleglobal.yale.edu/content/brazil-charts-own-course. ↩
Freemantle, Simon and Jeremy Stevens, “Brazil weds itself to Africa’s latent agricultural potential,” Standard Bank, Economics: BRIC and Africa, February 1, 2010, p. 2, at www.standardbank.com/research (search function keyword “BRIC in Africa”) ↩
In 2008 “the BNDES brand was redesigned to enable better communication with society,” changing its name (but not its initials) to “El banco de desarrollo de Brasil” (The Brazilian Development Bank). BNDES, “Annual Report 2008,” pp. 6, 10, at http://www.bndes.gov.br/SiteBNDES/bndes/bndes_en/Institucional/The_BNDES_in_Numbers/Annual_Report/annual_report2008.html. ↩
Coutinho, Luciano (BNDES President), “Challenges for Industrial Policy, Innovation and Competitiveness in Brazil,” Presentation at Woodrow Wilson Center for Scholars, July 2010, at http://www.wilsoncenter.org/index.cfm?topic_id=1425&fuseaction=topics.event_summary&event_id=626193. ↩
Lima, Luis Afonso Lima and Octavio De Barros, “The Growth of Brazil’s direct investment abroad and the challenges it faces,” Columbia FDI Perspectives, no. 13, August 17, 2009, at http://www.vcc.columbia.edu/content/growth-brazils-direct-investment-abroad-and-challenges-it-faces. ↩
Xinhua, “China, Brazil pledge to promote strategic partnership, strengthen cooperation,” April 16, 2010, at http://news.xinhuanet.com/english2010/china/2010-04/16/c_13253390.htm ↩
Osavo, Mario, “Brazil-China: An Asymmetric Trading Partnership,” IPSD, April 16, 2010, at http://ipsnews.net/news.asp?idnews=51077. ↩
Barbosa, Alexandre de Freitas, “Brazil: Dances with Dragon,” December 1, 2009, Yale Global, http://yaleglobal.yale.edu/content/brazil-dances-dragon. ↩

2011 Asia Clean Energy Forum

Maggie Barron — Tue, 10 May 2011 14:46:30 -0400

Policymakers, private sector firms, and non-governmental organizations (NGOs) across Asia gathered on 20-24 June 2011 in Manila, Philippines for the 6th Asia Clean Energy Forum, “New Business Models and Policy Drivers: Building the Low-Carbon Future.”

The forum, hosted by the Asian Development Bank (ADB), the US Agency for International Development (USAID) and the World Resources Institute, is the premiere knowledge sharing platform on best practices in policy, technology, and finance for clean energy in the Asian region.

The forum promoted best practices in clean energy policy and regulation, financing and investment, innovative business models, and energy access. Parallel breakout sessions provided opportunities to discuss successfully innovative and creative methods to break down barriers to large scale clean energy development and deployment in Asia Pacific.

Event Program (PDF, 7.0 Mb)
View “Week at a Glance” Schedule
More information is available on the ADB website.

World Bank Energy Strategy Must Address Energy Poverty and Climate Change

Athena Ballesteros — Thu, 10 Mar 2011 13:37:58 -0500

In consultations, a range of countries and interest groups have called for an energy strategy that supports sustainable development.

The World Bank is in the final stages of drafting a new energy strategy due late April 2011. The strategy has drawn so much attention because of its potential to address two major challenges confronting developing countries – energy poverty and climate change. While the strategy could be an opportunity for the institution to tackle both challenges simultaneously, some stakeholders are concerned that it may sway too much in one direction, addressing one challenge while undermining the other.

To balance these differing opinions, the World Bank embarked on an eight month consultative process with input from client and donor countries, civil society, the private sector, and others (see Box 1). We studied the reports of the consultations carefully to distill important messages emerging from the process. There appears to be some areas of resounding agreement, while in other areas, differing perspectives emerged. The overarching message delivered to the World Bank is a demand for investments in the energy sector that produce sustainable development outcomes.

Box 1: Consultations on World Bank Energy Strategy

From January to August 2010, The World Bank embarked on a consultative process with donors, clients and other stakeholders. The process included:

31 Countries
56 in person meetings
170 written submissions
2100 participants from government, regulatory bodies, academia, civil society, the private sector and other groups for more information visit www.worldbank.org/energyconsultations

Areas of Agreement

Many stakeholders have prompted the World Bank to shift its focus to small-scale, distributed, renewable energy-based generation technologies such as solar home lighting systems or village micro-grids powered by run-of-river mini hydropower systems. Such technologies can directly address the largely unmet energy needs of the 1.5 billion poor without access to electricity, particularly in rural areas. This message was consistently delivered in various parts of the world. For example:

At the meeting in Nairobi, the private sector called for a focus on renewable technologies due to the abundance of resources on the continent, while government participants pointed to its cost-effectiveness in the long-run. Participants from academia and think tanks highlighted the efficacy of decentralized renewable energy systems in meeting the economic and social needs of the poor.
Similarly, in Laos, non-governmental organizations pointed to the impacts of the export-oriented hydropower project (Nam Theun 2) on the resource-dependent poor. Participants from the private sector and the public utilities recommended that future energy investments focus on tapping local renewable resources, including solar and hydropower, to meet the income-generating needs of the poor within the country.
In the Netherlands, the government expressed a preference for the World Bank to avoid commercially viable centralized generation projects, while Dutch private sector and NGO participants pointed out that decentralized generation would have the greatest poverty reduction impacts.

Such consensus also emerged from diverse interest groups and countries on the value of the World Bank investing in energy efficiency, supporting integrated resource planning in the energy sector and across sectors, and modernizing household fuels for cooking and heating.

Areas of Disagreement

The areas where stakeholders diverged have been familiar issues of contention on the World Bank Board. In some cases, differences of opinion between interest groups within the same country came to light. One of the most hotly contested issues was the World Bank’s role in fossil fuel lending. For example:

In Bangladesh, participants from the private sector, public utilities, and some members of parliament argued strongly against any prohibitions on the continued development of their abundant domestic coal resources, as they see it as a constraint on the country’s development goals. In contrast, the Bangladeshi government expressed a preference for developing low carbon energy sources and using coal-based resources only in exceptional cases.
In consultations with African energy ministers, South Africa argued against the World Bank discontinuing lending for fossil fuel-based projects claiming that they have no viable alternatives for baseload power vital to their pursuit of economic growth and industrialization. Instead, they prefer to see the World Bank invest in cleaner coal technologies, while simultaneously investing in renewables.
Among stakeholders in Europe, there remained concerns that continuing World Bank investments in carbon intensive fuel technologies would counteract its efforts to mitigate climate change, leading to demands for a definitive phase out of fossil fuel lending.

Similarly, there were other issues that elicited a spectrum of responses including energy subsidy reform, financing additional costs of lower carbon projects, and large scale hydropower dams.

Our Recommendations for the World Bank

The World Bank’s leadership may find it challenging to balance all the diverse interests in one strategy document. However, what they can do is put in place a set of procedures that will allow them to objectively evaluate trade-offs and make investment decisions that support the sustainable development priorities of their clients. Such procedures, as we have argued earlier, should include:

Undertaking options assessments to investigate and transparently disclose the full range of energy options available to meet a client country’s demand before moving forward with any investment. Such assessments should be based on integrated planning processes at appropriate levels (regional, national or sub-national) that take into account resource availability and use in the energy and other sectors.
Valuing the net costs of shifting to low-carbon alternatives through the use of GHG Accounting tools to calculate the volume of emissions from projects as well as the use of pricing methods, such as market prices or shadow prices, to calculate the value of reducing or avoiding emissions in alternative options. This will help the World Bank assess the additional resources required from climate change funds to buy down the higher costs of lower carbon options. On a broader level, GHG accounting will also help the institution manage and reduce the emissions of its overall investment portfolio.
Engaging stakeholders in inclusive and transparent processes when making investment decisions to ensure equitable, pragmatic and sustainable outcomes.
Adopting robust environmental and social standards for energy investments, particularly large hydropower given its serious ecological and social footprint. Although designed for the private sector, many of the environmental, social, and human rights standards articulated in the draft IFC performance standards would provide a strong basis for safeguards at the World Bank. The energy strategy would also need to articulate standards for providing accessible means for dispute resolution for affected stakeholders.

We believe that the writing on the wall is clear – stakeholders across countries and interest groups would like the World Bank to devise an energy strategy that supports sustainable development in developing countries. It is imperative that World Bank leadership not dismiss the often polarizing debates as unnecessary noise, but instead hear the clarion call for meaningful reform in defining the institution’s role in promoting a sustainable energy future.

Tom Nagle is a research intern for the International Financial Flows and the Environment project at WRI. He is also pursuing a Masters degree in International Relations and Environmental Policy at Boston University focused on the nexus of energy and economic development.

The Road to the Green Climate Fund

Athena Ballesteros — Mon, 14 Feb 2011 16:59:22 -0500

This post originally appeared on the World Bank blog Development in a Changing Climate

The UN Climate Talks in December 2010 concluded with a set of decisions known as the Cancun Agreements, which included the establishment of the Green Climate Fund (GCF). Having been involved in many of the negotiating sessions, I know that this fund is seen by many, particularly developing countries, as an opportunity to create a ‘legitimate’ institution for delivering scaled-up finance to address climate change.

However, there remains significant skepticism on whether or not this Fund could deliver adequate and predictable resources in a timely manner. Much work has yet to be done before the Green Climate Fund could become a reality.

Getting organized

In Cancun, the COP decided to set up a Transitional Committee (TransComm) and entrusted it with the task of developing the operational documents for the GCF and making recommendations to the COP in Durban. The Transitional Committee will include representatives from 25 developing countries and 15 developed countries. Some countries have announced their nominations, while others are still in the process of finalizing.

The delay comes as no surprise of course. Nominations within regional groups remain a highly contentious and political issue. With limited seats countries are grappling to ensure they have a voice in the body that will design the Fund. I’ve heard the mix of skills and expertise on finance, climate and, development represented in the individuals nominated and they vary from country to country.

The initial meeting of the committee will be jointly convened by the Government of Mexico and the Executive Secretary of the UN Framework Convention on Climate Change in March 2011. That first meeting will have to decide the rules of the road for the Transitional Committee, everything from its terms of reference to the participation of observers to the design of a new registry that will record actions taken by developing countries, and the financial support provided by developed countries.

Already civil society organizations are asking for mechanisms to ensure participation. This is important to ensure transparency in Transcomm’s processes. The private sector and representatives of international organizations, MDBs and UN agencies all want to be involved. The question is how Mexico and the UNFCCC secretariat will manage the process of selecting observers since the TransComm is yet to develop guidelines and operational procedures at its initial meeting.

Expectations for Durban

In developing its recommendations for COP-17 in Durban, the TransComm will develop the operational documents of the GCF that address a range of different issues (see box). By Durban, it is unlikely that the TransComm will be able to address all these issues in full detail. Neither should it attempt to do so. One of my main concerns is determining who eventually gets to elect the GCF Board.

Transitional Committee Terms of Reference

Legal and institutional arrangements
Fund Board Rules of Procedure
Financial instruments, funding windows and access modalities
Complementarity with other funds and institutions
Role of secretariat
Independent performance evaluation
Standards, safeguards and accountability
Expert and technical advice mechanisms
Stakeholder input and participation

The TransComm can make sufficient progress by Durban if it focuses its work on:

developing a shared vision of the GCF’s objectives, scale and scope,
putting in place the institutions that will manage the GCF, such as the GCF Board and the secretariat, and
defining the relationship between the GCF and the COP.

For other questions, such as how countries can directly access funds, the financial instruments and models to be used, and mechanisms to ensure environmental and social standards – all important issues - the TransComm may only manage to agree on principles and develop guidelines for the Board to further develop the detailed rules after Durban.

If the GCF is to have adequate and predictable resources to carry out its mandate, then countries will need to commit to long-term and scaled-up finance to the Fund. Unfortunately, we’ve lost all other text pertaining to sources. In the Cancun Agreements, Parties noted the report of the High Level Advisory Group on Climate Change Financing, established by the UN to explore options for innovative sources for long-term finance.

I believe it is important to set realistic expectations and anticipate that designing and making the GCF operational will take some time. Funds won’t start flowing immediately. The international community therefore needs to find a way to finance the gap as many of the vulnerable developing countries and those least able to cope are already suffering from the devastating impacts of climate change.

Power, Responsibility, and Accountability: Re-Thinking the Legitimacy of Institutions for Climate Finance

Maggie Barron — Tue, 14 Dec 2010 12:27:05 -0500

Executive Summary

The 2009 Copenhagen Climate Summit left unresolved major questions about how to fund lowcarbon development in developing countries. In a high-level political declaration—the “Copenhagen Accord”—developed countries agreed to “provide new and additional resources … approaching USD 30 billion for the period 2010–2012” and to a goal of jointly mobilizing USD 100 billion a year by 2020 from both public and private sources, to address the needs of developing countries. As the negotiations on a global climate deal continue, disagreement remains on how much of these funds will come from public or private sources and whether these billions should be delivered through new or existing institutions. There is also heated debate over whether a single centralized institution or a decentralized approach that coordinates international, regional, and national institutions would be more effective.

Although there are many variations in government positions, broadly speaking, developed countries favor a substantial role for existing institutions, such as the multilateral development banks (MDBs) that they have funded and led for the past 60 years. Developing countries prefer new institutions, arguing that existing ones favor the interests of contributor countries and have failed to deliver on promises to support poverty alleviation and sustainable development. The ongoing negotiations on a global climate deal reflect this “northsouth” gulf. Despite these differences, one thing is clear: if the institutional arrangements entrusted with managing new flows of climate finance are to succeed in raising the required resources and in investing these resources effectively, they will need to be perceived as legitimate by both contributors and recipients.

Institutional Arrangements for Climate Finance: Power, Responsibility, and Accountability

Box A. Dimensions of Power, Responsibility, and Accountability in the Design of a Climate Finance Mechanism

Power: The capacity—both formal and informal—to determine outcomes

How will the financial mechanism’s governance structure distribute voice and vote between and among contributors and recipients?
What role will the United Nations Framework Convention on Climate Change’s (UNFCCC) institutions, including the Conference of the Parties, play in guiding the financial mechanism?
To what extent will contributors be able to determine funding priorities by placing conditions on the resource mobilization and allocation process?
How influential will the secretariat and management staff of the financial mechanism be in determining project design and selection?
Will advisory groups, civil society observers, and local communities play a role in determining how the financial mechanism operates?

Responsibility: The exercise of power for its intended purpose

Are the financial mechanism’s standards, program priorities, and eligibility criteria strong enough to ensure its resources are invested fairly and effectively?
How do cost-sharing formulas (e.g., incremental, marginal, transformative costs) allocate responsibilities between contributor and recipient countries, and between the financial mechanisms and recipient countries?
To what extent are national institutions and local civil society entrusted with ensuring the effective design and implementation of investments?

Accountability: The standards and systems that ensure power is exercised responsibly

How does the financial mechanism measure, evaluate, and incentivize results?
Are effective environmental and social safeguards in place to ensure the investments do no harm?
How are fiduciary duties and financial management standards supported and enforced?
Are grievance and inspection mechanisms in place to ensure that standards are followed?

The full report seeks to ground the debate on the future of climate finance in an objective analysis of existing efforts to finance climate mitigation and adaptation in developing countries. The authors step back from the question of which institutions should be entrusted with new flows of climate finance to examine instead how governments can design a climate financial mechanism in a way that is widely perceived as legitimate. We identify three crucial dimensions of legitimacy: power, responsibility, and accountability (see Box A). While these three dimensions interrelate and overlap, we have found them to provide a useful analytical framework to analyze and guide choices in institutional design.

We review the governance structures, operational procedures, and records to date of 10 international and national financial mechanisms, with reference to these core dimensions of legitimacy, to draw lessons for future institutional arrangements (see Box B). We place special emphasis on the experiences with the Global Environment Facility (GEF), which, in operation since 1994, is the longest serving operating entity of the United Nations Framework Covention on Climate Change (UNFCCC) financial mechanism. In addition to the GEF, we review experiences from the Multilateral Fund for the Implementation of the Montreal Protocol, in operation since 1990, which is often referred to as a model for future funds. The remaining funds reviewed are much newer and yield more insights with regard to design, rather than operation.

We recognize that perceptions of the legitimacy of a financial mechanism are inherently subjective and that this subjectivity is revealed in the very different preferences expressed by contributor and recipient countries. We believe, however, that if governments were to discuss the dimensions of legitimacy more explicitly, the stakes and the trade-offs would become more apparent, and a more shared understanding on how to design a legitimate financial mechanism would emerge. We believe that the failure, thus far, to address the distribution of power, responsibility, and accountability more explicitly has led to a proliferation of financial mechanisms that are underfunded, which in turn leads to calls to create new mechanisms.

We recognize that perceptions of a financial mechanism’s legitimacy will also depend upon an institution’s performance—its demonstrated capacity to commit funding to investments that reduce greenhouse gas emissions and build resilience to climate change. Most of the climate financial mechanisms studied have not been operating at a scale or for a time period that would allow a full assessment of their performance. We nonetheless seek to make recommendations that could improve the design and the performance of new and existing climate financial mechanisms.

We conclude that a new global deal on climate finance is likely to significantly redistribute power, responsibility, and accountability between traditional contributor and recipient countries. Most significantly, the power of emerging economies to control climate finance mechanisms will grow, as will their responsibility and accountability for the performance of these institutions. In light of the dramatic changes in global politics and the global economy in past decades, this redistribution seems both long overdue and necessary to provide the basis for a successful global partnership on climate finance.

Conclusions and Recommendations

This is a dynamic time for climate finance, as the international community struggles to craft mechanisms that are perceived to be legitimate by all UNFCCC Parties and that are capable of funding climate-related activities efficiently and at scale. Our analysis of established and new climate financial mechanisms and the current UNFCCC negotiations leads us to conclude the following:

Change is coming. A new global deal on climate finance will likely reinterpret the principles that in the past have guided the design of climate finance mechanisms in a way that significantly redistributes power, responsibility, and accountability between traditional contributor and recipient countries.
A new balance of power, responsibility, and accountability could enhance recipient country ownership. Greater representation of developing countries on the governing bodies of international financial institutions more generally, and climate finance mechanisms more specifically, should help ensure greater emphasis on the national and local “ownership”—and thus the effectiveness—of climate finance investments.
A new understanding of how to balance national interests with global responsibility and accountability is required. This will require assurance that nationally driven investments contribute to global benefits in the form of net emission reductions and that investments protect the most vulnerable countries and communities.
New financial mechanisms—at both the global and the national level—are necessary. If the international community raises the scale of public finance necessary to move developing countries onto a low-carbon, climate-resilient pathway, the capacity and the creativity to spend these resources well will necessitate the creation of one or more new financial mechanisms at the global level and multiple nationallevel institutions.
Existing institutions must also be reformed. The scale of the climate change challenge and of the scale of the funding necessary to respond to that challenge will also necessitate the reform of existing financial institutions, many of which have been supporting fossil fuel–led growth and have yet to mainstream concerns about the impacts of climate change into their strategies.
Current negotiating positions reflect deep historical and ideological divisions—particularly between developed and developing countries—that will need to be overcome by building trust and experimenting with new kinds of relationships. Developed countries have been keen to build on existing financial institutions they have shaped and traditionally controlled. Developing countries are wary of these same institutions, which they see as historically having advanced contributor interests and theories of development, through both the formal and informal exercise of donor power.
At the international level, the choice between reforming traditional development agencies, such as the GEF, U.N. Development Programme (UNDP), the U.N. Environment Programme (UNEP), and MDBs, and creating new financial mechanisms will raise issues of institutional economy and effectiveness. In order to generate a greater sense of trust and ownership, backers of existing agencies may have to accept a degree of duplication of existing capacity through the creation of new mechanisms—particularly where significant gaps in capacity are identified—and to accept strengthened lines of accountability of climate finance mechanisms to the UNFCCC Conference of the Parties (COP). On the other hand, those calling for the creation of new institutions may need to concede that it may waste precious resources to replicate the staff and services provided by existing agencies.
Balancing the roles of international and national institutions will also involve trade-offs. Traditional development agencies have gained the trust of contributors by putting in place systems to both measure and manage impacts of their investments. Developing country recipients, however, have been frustrated by the bureaucracy and the focus on generic rather than country-specific concerns that these systems can generate. Many developing countries will likely struggle to convince contributors that their national institutions have the capacity to manage large-scale development finance without the support of development agencies. Notably, a number of developing countries are taking steps to build and strengthen this capacity and will need support to do so.
Delivering climate finance at scale, at least in the short term, will likely involve multiple mechanisms, both new and reformed. This is true because of the complex politics of the international negotiations and the differing views of legitimacy held by contributors and donors. The urgency and complexity of delivering funds at scale argues for moving forward, at least in the near term, with the institutions that we have, and investing in the strength and quality of COP guidance and national planning processes to ensure coordination and coherence. This experience should then guide the design and operation of the new institutions that will become necessary as the scale of resources grows.
Low-carbon, climate-resilient development is an unexplored frontier for all countries and has potential risks as well as benefits. While high standards will have to be developed and maintained to ensure emissions fall and the vulnerable are protected, climate finance will necessarily entail experiments with new policies and technologies that will need to be watched closely for unintended environmental and social impacts.
Policymakers must agree on ways to diversify the sources of climate finance and to de-link them from the levers of informal power. If existing institutions are to meet evolving standards of legitimacy, then their fundamental governance structures, as well as their operational procedures, will need to be reformed to give greater voice to developing country recipients. If formal grants of power are to lead to the effective exercise of that power, the international community must also make greater efforts to identify sources of revenue, such as new levies or longterm commitments, that are independent from the discretion of contributor governments.
It is necessary to build the capacity of non-state actors and civil society to monitor climate finance governance. Civil society groups at all levels can and are playing an important role in monitoring and influencing decision-making within climate finance funds. But they need to occupy such spaces more effectively than they have to date by monitoring and engaging in more inclusive decision-making processes with technical rigor and authority. However, “representation” of nonstate actors can be a very difficult issue—civil society is diverse with widely differing views.
Near- and medium-term climate finance should focus on strengthening national institutions. A next generation of climate investments should promote the responsibility of recipient countries by strengthening the national institutions that will implement mitigation and adaptation activities and by ensuring their transparency and accountability to citizens within countries, as well as to the international community. While it is important that development agencies provide technical support to national institutions, they should work in closer partnership with national stakeholders. It will be particularly important to engage with stakeholders outside of government, including the private sector, independent research institutions, and civil society. Such collaborations can help ensure climate finance proposals more appropriately reflect national circumstances and priorities.
It is important to draw from the lessons learned from decades of development finance to build national institutions that reflect universally accepted principles of good governance. Traditional finance and development institutions have decades of experience—both good and bad—in translating internationally agreed upon agendas into national and local investments. National institutions should draw from these experiences and be designed and supported to operate in accordance with universal principles of good governance. Strong provisions for accountability should be put in place, including sound fiduciary management, anticorruption measures, and grievance mechanisms and inspection procedures that ensure compliance with environmental and social standards and safeguards.

Governing Climate Finance: The Importance of Reporting Guidelines and Review Mechanisms to Ensure Transparency & Accountability

Athena Ballesteros — Thu, 02 Dec 2010 19:08:45 -0500

This “Budget Brief” originally appeared on the International Budget Partnership website. You can read the entire text, and download a PDF of the brief, here.

The international community has come together to address the challenge of global climate change. Through the United Nations Framework Convention on Climate Change (UNFCCC), participating governments have established a goal of stabilizing the global average temperature within 2 degrees C and are engaged in an ongoing process of negotiating what needs to be done, who needs to do it, what it will cost, and who will pay for it. The next round of negotiations, the COP-16 (Conference of Parties), will be from 29 November-10 December 2010 in Cancun, Mexico. One of the most critical – and contentious – issues that will be addressed will be reaching agreement on financing climate change mitigation (actions to reduce emissions and stabilize temperatures) and adaptation (actions to reduce impact of current climate shifts and increase resilience to future impacts).

The COP-16 follows the last round of negotiations that took place in Copenhagen in December 2009. In Copenhagen countries committed to short-term, ―fast start financing and to coming to agreement on a long-term ―balanced package that provides adequate and equitable funds for mitigation and adaptation. In addition to decisions about how climate change finance will be implemented at the international and national level, whether through existing agencies and processes or new institutions and mechanisms, agreement must be reached on how to ensure that finance flows are completely transparent in order to enable sound decision making about distribution and use of resources, public participation, and adequate oversight. Thus parties to the COP-16 must decide on the format and review process for reporting financial data from donor and recipient countries and guarantee that the public within countries has full access to this information.

Agreements reached in Cancun can lay the foundation for a more robust climate regime in the long run. It will be critical for negotiators to reach decisions on key finance building blocks that can be implemented immediately and not fall back into a ―nothing is agreed till everything is agreed position. There is simply no time for that; the latest science tells us we need to accelerate actions if we are to stabilize temperatures at a safe level.

This brief looks at climate finance over the past year and how the current level of reporting is inadequate to the task of ensuring that funding commitments are fulfilled and funds are used effectively. It touches on the important role that civil society and public participation within countries receiving climate funds can play in decision making and oversight and presents recommendations for reporting mechanisms and public participation for the COP-16 and future negotiating sessions to consider.

This Brief was prepared by Athena Ballesteros, a senior associate for Institutions and Governance at the World Resources Institute, and Vivek Ramkumar, manager of the Open Budget Initiative at the International Budget Partnership.

Read the full text here

From Copenhagen To Cancun: Climate Finance

Athena Ballesteros — Tue, 30 Nov 2010 18:04:29 -0500

An update on the role of climate finance in the international climate negotiations.

An agreement on climate finance is critical to success in Cancun. Last year’s climate talks in Copenhagen recognized that developing countries will need scaled-up financial support to reduce their emissions and adapt to the impacts of climate change. Developed countries have since made financial pledges towards the $30 billion in promised “fast start” climate finance to meet the short-term needs of developing countries. In Copenhagen, developed countries also committed to mobilizing $100 billion from a wide variety of sources to meet developing countries financing needs by 2020, but the long-term needs remain much higher.

From Copenhagen to Cancun covers the key issues in the ongoing international climate negotiations. The series looks at where things stand after the 2009 UN Framework Convention on Climate Change (UNFCCC) meeting in Copenhagen and how discussions progress towards COP-16 in Cancun.

The current negotiating text for the meeting in Cancun outlines the critical decisions that need to be made in order to mobilize stable, predictable, and adequate resources for the long-term, and manage it in a transparent and effective manner. The following issues will take top priority on negotiators’ “to do” list for climate finance:

Establishment of a new global climate fund, with arrangements for its governance.
Creation of a framework to account for the delivery fast-start and long-term funding commitments; and
Laying the foundation for generating stable, predictable and adequate long-term finance particularly through innovative sources of finance.

Establishing a New Global Climate Fund

In Copenhagen, countries called for the establishment of a new Climate Fund to scale-up climate financing to developing countries. While climate-specific funds already exist both within and outside the UNFCCC that support projects in developing countries, these funds are inadequate to meet the needs of developing countries. Further, if a decision on the new Fund is to gain the broad-based political support it needs, it must embrace strong governance structures and procedures that will give a greater voice to developing countries.

Since Copenhagen, the debate has centered on the essential elements of the governance and operations of the new Fund. For example, Parties need to decide:

the legal nature of the Fund and a process for establishing it;
the scale of the fund and where its resources would come from;
the size and composition of the Board that will govern the fund; and
the principles to guide the selection of the trustee and secretariat.

The ministers face some clear options on each of those issues in Cancun. The negotiations are complex, and countries hold sensitive positions, but at the end of the day the Fund needs to be established in a way that is representative of both developed and developing country interests while at the same time allowing for maximum efficiency and effectiveness to disburse and deliver resources to those who need it the most. They will have to make some trade-offs but it is feasible for them to arrive at an agreement.

Accounting for the Delivery of Climate Finance Pledges

To date, WRI research indicates that individual country pledges add up to $29.27 billion of the $30 billion in ‘fast start’ funding promised in Copenhagen.

Countries have also been taking steps (e.g. through budget requests and appropriations processes) to make their pledges available, and have been providing additional details on their pledges. For example, the Obama Administration in the U.S. has requested Congress for $1.9 bn for 2011, while the EU claims to have mobilized 2.2 bn euros (or nearly $3 bn) for 2010.

This increased transparency is welcome. It is important to hold countries accountable for their commitments, but also to build trust among parties. It can also point to gaps in the flows, and guide future allocation of resources. However, further clarity is needed from all countries on:

The objectives they are supporting, such as clean energy, REDD+ and/or adaptation,
Whether the funds are “new and additional” in relation to finance provided for other development priorities,
Which bilateral and multilateral institutions are being used to channel the resources,
The types of financial instruments, whether loans, grants, guarantees, used, and
What countries are counting towards their fast-start commitments. This can be achieved through more detailed guidelines for reporting on finance.

Scaling-up Long-Term Finance

Developed countries must deliver on their commitment to provide the US$100 billion per year to developing countries by 2020 to help them respond to the challenges of climate change. It will be very difficult to secure agreement on global climate action if there is no demonstrated willingness to help generate stable, predictable and adequate long term finance.

The UN Secretary General’s High-Level Advisory Group on Finance (AGF) has shown that scaling-up climate financing to support developing countries for climate change is challenging but feasible. A menu of options is available to help deliver tens of billions of dollars from each option towards the $100 billion financial target that was agreed to at the Copenhagen Summit.

Now, it is up to the all countries to choose the option/s that work best in their domestic contexts and take necessary steps to raise new revenues through these innovative mechanisms. At Cancun, the COP can launch a process that encourages countries to generate new resources and provide a platform for them to coordinate their efforts.

It is also up to the developed countries to make a share of these resources available to developing countries for tackling climate change. This is also important to ensure that the new Fund has adequate resources to support the climate mitigation and adaptation goals of developing countries.

The Clean Technology Fund: Insights for Development and Climate Finance

admin — Fri, 12 Nov 2010 14:15:11 -0500

Over the past year, the Clean Technology Fund (CTF) administered by the World Bank in partnership with Regional Development Banks has begun financing clean technology deployment projects in fast growing developing countries. The objective of the CTF is to use the minimum level of concessional finance necessary to realize investment opportunities that will have transformative effects on the greenhouse gas (GHG) emissions of the recipient country over the long term. As of March 2010, US$4.35 billion –nearly the entirety of the $4.405 billion in funds pledged to the Clean Technology Fund (CTF)– have been earmarked to support investment plans in 12 countries, and a regional concentrating solar program in North Africa. $888 million dollars in financing for 15 projects in 8 countries has been approved to date.

This working paper reviews recent developments at the CTF, including the status of contributions to the fund, its governance structure, and evolving results framework. Its focus is on the projects for which CTF financing has been approved to date. It analyzes the Mexico and South Africa investment plans and projects as case studies to illustrate some of the challenges and opportunities of addressing policy, regulatory and governance issues in project design and implementation. It is part of a series of working papers WRI has produced analyzing evolving developments at the CTF. Our March 2010 Working Paper, The Clean Technology Fund: Insights for Development and Climate Finance, reviewed the basic mechanics of the Fund and the Clean Technology Investment Plans approved.

Note: This version of the Working Paper was updated on 30 November 2010 from the version posted on 11 November 2010. Corrections were made on page 4 regarding the role of private sector observers, and on pages 9 and 13 regarding the implementing modalities of the Turkey Commercializing Sustainable Energy Financing Program. A revised paper reflecting on developments at the November 2010 meeting of the CTF governing committee will be released in early 2011.

Topic: multilateral development banks

Striking the Balance: Ownership and Accountability in Social and Environmental Safeguards

Executive Summary

Survey of Public Financing Institutions' Use of Instruments

ADVISORY: Mayor Bloomberg and World Bank President Kim Headline Transforming Transportation 2013

Public Financing Instruments to Leverage Private Capital for Climate-Relevant Investment: Focus on Multilateral Agencies

Executive Summary

Findings from this paper for public actors and international mechanisms, like the Green Climate Fund, include the need to:

STATEMENT: Development Banks Announce "Game Changer" for Sustainable Transport at Rio+20

Ecosystem Services Review for Impact Assessment

Overview

Table of Contents

Downloads

Get Involved

Timeline

Conceptual Framework

Why Use the Ecosystems Services Review for Impact Assessments?

Ecosystem Services Requirements in new IFC Performance Standards

WRI Experts on Asia's Clean Energy Future

Opportunities of a Low-Carbon Economy

Global Leadership and Innovation

The Meaning of “Clean” Energy

Scaling Up Smart Renewable Energy Policies

A Role for Entrepreneurs

Energy Efficiency Brings a Competitive Advantage

An Urgent Necessity

Emerging Actors in Development Finance: A Closer Look at Chinese and Brazilian Overseas Investments

Introduction

A New Geography of Growth

Expanding South-South Trade

China Goes Global

Chinese Overseas Investment Banks

China Export Import Bank

Why is China Going Global?

Growing Investment in Africa

Imports from Africa

Resources-for-Infrastructure Deals

Brazil Takes Off

Role of Brazilian Financial Institutions

China and Brazil: A Strategic Partnership?

WRI’s Work

2011 Asia Clean Energy Forum

World Bank Energy Strategy Must Address Energy Poverty and Climate Change

Box 1: Consultations on World Bank Energy Strategy

Areas of Agreement

Areas of Disagreement

Our Recommendations for the World Bank

The Road to the Green Climate Fund

Getting organized

Expectations for Durban

Transitional Committee Terms of Reference

Power, Responsibility, and Accountability: Re-Thinking the Legitimacy of Institutions for Climate Finance

Executive Summary

Institutional Arrangements for Climate Finance: Power, Responsibility, and Accountability

Box A. Dimensions of Power, Responsibility, and Accountability in the Design of a Climate Finance Mechanism

Conclusions and Recommendations

Governing Climate Finance: The Importance of Reporting Guidelines and Review Mechanisms to Ensure Transparency & Accountability

From Copenhagen To Cancun: Climate Finance

Establishing a New Global Climate Fund

Accounting for the Delivery of Climate Finance Pledges

Scaling-up Long-Term Finance

The Clean Technology Fund: Insights for Development and Climate Finance