Reframing development goals to catalyze climate finance
Closing the climate finance gaps
Posted October 25, 2018
The recently released IPCC report provided the sobering news that time has effectively run out to avoid runaway climate change. Many parts of the world, especially in developing countries are now locked into 2 to 3 degrees of change, irrespective of emissions reduction efforts. With tipping points closer than ever before, unless we are ready for a drastic transformation of our economic development models at all levels, it is likely that we will lose the battle against global warming.
While there is growing evidence that engaging in low-carbon, climate-smart business and development pathways presents economic opportunities, which are currently underestimated, for many developing countries, the cost for achieving climate targets is colossal, and the need for finance is urgent.
The Green Climate Fund (GCF) is the largest multi-lateral financial mechanism for climate investments, and as such, presents an opportunity to catalyze much-needed finance.
To expand the impact of GCF-funding and empower locally driven climate actions, a pioneering collaboration between the Government of Germany, the United Nations Development Programme (UNDP), UN Environment and the World Resource Institute (WRI), supported nine countries to put systems in place to understand and engage effectively with the Green Climate Fund and to systematically address overall climate finance gaps and opportunities.
Earlier this month, practitioners from Benin, Colombia, El Salvador, Fiji, Ghana, Kenya, Nepal, the Philippines and Uzbekistan, gathered in Berlin to share lessons and experiences from the past three years of work under the “GCF Readiness Programme,” along with the GCF Secretariat, technical experts, and other partners, including FAO and GIZ.
This programme allowed ministries of environment, finance and planning establish protocols and technical committees for the creation of policies and processes to effectively access climate finance from public, private, domestic and international sources. These sources stretch even further, beyond the GCF’s current US$3.5 billion in commitments that will increase the resilience of 217 million people across the globe and avoid over 1.3 billion tonnes of CO2. The programme allows countries to take all these working pieces and align them with their Nationally Determined Contributions or NDCs (the commitments every country made towards the Paris Agreement).
Key stakeholders from supported countries developed decision-making tools to prioritize and screen climate investments or projects. National banks, environment funds, and NGOs were supported to be accredited to access the GCF, and sequence and manage funds directly, on behalf of their countries. The Fiji Development Bank and the National Environmental Management Authority of Kenya are now fully accredited to access the GCF directly and have solid proposals in the pipeline, thanks to this support.
One underlying benefit of this programme was evident during the Berlin meeting: while preparing to access climate finance, governments experienced an unprecedented paradigm shift, whereby they realized that solving the climate equation requires not just getting projects approved for funding, but rather the reframing of development and economic strategies to adequately reflect mitigation and adaptation targets put forward in the NDCs, irrespective of the source of finance.
This is groundbreaking. Rather than looking at one-off solutions to a wickedly complex problem, these countries are taking a system-wide approach, the type of transformational shift we will need if we are too keep temperature rises below 2 degrees and help our economies and societies adapt to the pressing needs presented by climate change.
Sectoral policies and even national laws were passed for this objective. Industry leaders and financial institutions were actively engaged in this process to ensure that climate-smart investments become the norm, and that they will reduce risks for businesses and investors. All this means that future climate actions have all the requisite elements to be replicable and scalable.
Policy-makers, business leaders and civil society can no longer ignore the science and the ticking clock on turning the tide on climate action. My generation, not the next, will be the first to bear the brunt of the impacts of global warming. My son, not yet two years of age, and his friends and countless millions of children around the world, will bear an even higher cost of climate change. That is simply unacceptable for my generation to allow to happen.
Claudia Ortiz is a Climate Finance Specialist with UNDP-GEF. Follow her on Twitter: @ortizmclaudia