Helen Clark: Speech at “Climate Finance for Development” Event, organized by the Permanent Mission of France to the United NationsApr 16, 2015
UNDP welcomes all present to today´s discussion on “Climate Finance for Development”.
I sincerely thank the Permanent Mission of France for approaching UNDP to co-organize this event. Our discussion today is important in the lead up to COP21 in Paris, and France´s desire to host this event exemplifies its strong commitment to making the COP a success.
The combined outcomes of the major global processes taking place this year are a “once in a generation” opportunity to set a transformational global agenda for sustainable development. Tackling climate change decisively is vital for that agenda to succeed.
In order to take forward the sustainable development agenda, including by adapting to and mitigating climate change, developing countries will need access to adequate, stable, and affordable finance. UNCTAD estimates that total investment needs in developing countries in key Sustainable Development Goals sectors over the proposed delivery period range from $3.3 - $4.5 trillion per year. Based on today’s level of public and private investment, developing countries would need to bridge an annual funding shortfall of between $1.9 and $3.1 trillion.
It is clear therefore that public finance alone can come nowhere near meeting the total financing needs for the transition to inclusive, low-emission, and climate-resilient development. All forms of finance – public and private, domestic and international –are essential for this task, and they can be seen as complementary and mutually-reinforcing.
As public finance is limited, a critical challenge is to ensure that it is used in the best possible ways – not only effectively and efficiently, but with the aim of catalyzing finance from other sources. The focus of our discussion today is therefore on how public and private climate finance can be scaled up to meet developing countries’ needs, and to share examples of how developing countries are unlocking valuable resources for sustainable development.
In UNDP´s work around the world, we see how technical, information, financial, and regulatory barriers and risks can be impediments to private investment in both mitigation of and adaptation to climate change. If these barriers and risks are not addressed, private sector investment either will not flow, or will not flow as much as it could, and/or will be more expensive than it needs to be.
The good news is that many countries are confronting this challenge by putting in place the enabling policy, institutional, and budgetary frameworks which pave the way for access to and delivery of climate finance. These measures can unlock new sources of capital in critical sectors, and can also lead to new jobs and improved livelihoods.
At UNDP, we support countries to identify the barriers and associated risks they face in attracting private investment, and to address those barriers and risks through well targeted policies.
• In Uruguay, for example, working in partnership with the Global Environment Facility (GEF), we supported the development of an enabling policy framework aimed at attracting private sector investments into wind energy. This helped to reduce the risks surrounding potential investment in this sector substantially. 460MW of new wind energy is now in operation, with total investment of 1.3GW anticipated by the end of 2015. Another benefit already delivered has been lower retail energy tariffs for consumers.
• Another example comes from Mauritius. There, UNDP, again with financing from the GEF, contributed to the capitalization of a feed-in tariff fund to promote roof-top solar power. The feed-in tariff scheme pays a premium price to commercial and residential investors in solar photovoltaic technology, thus generating sufficient return to attract private investment.
With the Green Climate Fund seeking to begin funding projects by October this year, it is important for developing countries to have in place policies, institutions, and budgetary frameworks which can catalyze climate finance. UNDP is committed to work with countries to achieve that. We are delighted to be among the first seven organizations to be approved as an accredited entity of the GCF.
At today’s event we will hear more about how countries have used public sources of finance to develop and implement the policies and systems which have helped them to catalyze other climate finance. In particular, two projects – one from Tunisia and one from Cambodia – will showcase innovation in how countries can unlock new sources of funding for climate action. We will also hear perspectives from two development banks on how to scale-up climate finance for development.
By sharing experiences and perspectives on climate finance, we can help inform the ongoing negotiations, and identify synergies across the processes on climate change, financing for development, and the post-2015 development agenda.
Allow me to conclude by expressing UNDP’s full commitment to working with France as host of COP21 and with all Member States to make the COP in Paris a success. Working together, we can lay the foundations for a low-emission and climate-resilient future which is inclusive and sustainable for all.