Environment and development

Financing climate change challenges


Climate change effects threaten to reverse progress towards achieveing the MDGs, especially among the poorest. Policy responses to climate change risks require significant investment, both in developed and developing countries. But a key concern is to mobilise this finance while maintaining international support to poverty reduction. A list of concrete actions lays out how to accelerate progress towards this MDG by 2015.

The Copenhagen Accord commits “developed countries to a goal of mobilising jointly USD 100 billion a year by 2020 to address the needs of developing countries”. This financing is intended to be balanced between climate change mitigation and adaptation and will come from a wide variety of sources – including public and private, bilateral and multilateral, and alternative and innovative sources of finance.


Innovative options under consideration by the United Nations High Level Advisory Group on Finance (AGF), combined with other funding sources, could provide well over the amount pledged in the Copenhagen Accord.


Options to enhance international investment and financial flows to developing countries

Total: USD 520 bn (average estimate)


How should financing be governed and delivered?


Mobilising climate change financing is only part of the story. Equally challenging is how international climate change funding should be effectively governed and delivered to developing countries. The development community’s decades of experience in development finance and aid effectiveness have demonstrated the importance of harmonising efforts and avoiding complex and fragmented sources of
financing, respecting country ownership, and ensuring that developing countries have sufficient capacity to effectively absorb and use the additional resources for their intended purposes. Managing for actual results on the ground is critical. The Bali Action Plan and Copenhagen Accord stress that actions to implement the convention should be “measurable, reportable and verifiable”. The OECD’s Creditor Reporting System and its associated Rio markers  - one for climate change mitigation and one for adaptation - have a valuable role to play in initial efforts to monitor climate change financing.


Actions that will make the difference

  • Ensure complementarity between development and climate change objectives and mainstream climate
    change into all aspects of national economic and development strategies
  • Co-ordinate financing streams at the global level
  • Actively seek innovative financing options to complement and leverage traditional financing sources for climate change finance


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