Climate finance: loopholes and opportunities

De Gruyter Handbook of Sustainable Development and Finance

Finance is one of the central aspects necessary for combatting climate change and is covered by a wide range of mechanisms, institutional arrangements and governing bodies with the United Nations Framework Convention on Climate Change (UNFCCC), validating claims that the Convention is indeed both a regime complex and a complex regime. The chapter begins by outlining those arrangements historically and how they, and the responsibilities pertaining to them, have evolved over time. It continues with a summary of some of the main points of contention, not the least of which have been disputes over the provision of resources from developed to developing countries, which have served to reinforce the North/ South divide, notably in the context of climate finance. The remainder of the chapter summarises the key themes and findings of the contributing authors to this section of the Handbook, who discuss the strengths and weaknesses of some of the central mechanisms for financing climate action within the UNFCCC, and beyond. They provide recommendations as to how the integrity of finance can be safeguarded, both within the Convention and beyond, where the impacts of povertyand COVID-19make resilience in the face of the escalating climate emergency especially difficult.

The objective of this paper is to present an assessment of existing and proposed mechanisms to financing climate change interventions in developing countries, and to provide guidance on the best ways to make progress in raising and utilizing such financing. Recent events pose major challenges to the availability and sustainability of public (official and developing countries’ domestic resources) and private financial flows to developing countries. Yet, they also provide an opportunity to implement mechanisms for collective action at a global scale, particularly on issues such as climate change that affect both developed and developing countries.

2010

In the Copenhagen Accord of December 2009, developed countries agreed to provide start-up finance for adaptation in developing countries and expressed the ambition to scale this up to $100 billion per year by 2020. The financial mechanisms to deliver this support have to be tailored to country and sector specific needs so as to enable domestic policy processes and self sustaining business models, and to limit policy risk exposure for investors while complying with budgetary constraints in OECD countries. This paper structures the available financial mechanisms according to the needs they can address, and reports on experience with their application in bilateral and multilateral settings.

Sustainability, 2021

Climate change adaptation is one of the main strategies to address global climate change. The least developed countries and the small island states that lack financial resources to adapt to climate change are the most vulnerable nations to climate change. Although it would be more economical to adapt to climate change compared to the anticipated damage of not doing so, the demand for capital is estimated to range to hundreds of billions. The crucial question is how to manage investments to adapt to climate change globally. This study provides an overview of existing international provisions on climate finance for adaptation. It includes provisions through international financial institutions, United Nations agencies, bilateral and multilateral channels, and the private sector. It also explores how private sector finance can be further attracted to invest in climate change adaptation.

2014

In" recent" years" development" aid" (also" commonly" referred" to" as" Overseas" Development" Assistance" or" ODA)" has" increasingly" been" allocated" for" the" mitigation"of"climate"change,"often"diverting"funding"from"more"traditional" development" purposes" such" as" poverty" alleviation." To" the" author’s" knowledge" no" other" study" identifies" the" determinants" of" the" increasing" provision" of" official" mitigation" finance" and" the" patterns" of" its" allocation" across" 180" developing" countries." This" PhD" thesis" includes" three" empirical" studies"and"a"theoretical"discussion"and"seek...

This article looks at the current climate finance architecture and its impact on developing countries climate change responses. The primary aim is to capture the contradictions that exist in the climate finance architecture particularly between those recommended by the United Nations Framework Convention on Climate Change (UNFCCC) and those advanced by developed countries otherwise known as non-UNFCCC climate financing mechanisms. The overall observation is that once non-UNFCCC climate financing mechanisms emerged and the more they were justified using the UNFCCC, the global response to the climate change problem was fatally wounded through a procedural derailment of UNFCCC objectives. This article calls for a review of non-UNFCCC with the aim of divesting them of the profit factor which in this case is the problematic.

Journal of Law Policy and Globalization, 2014

This article looks at the current climate finance architecture and its impact on developing countries climate change responses. The primary aim is to capture the contradictions that exist in the climate finance architecture particularly between those recommended by the United Nations Framework Convention on Climate Change (UNFCCC) and those advanced by developed countries otherwise known as non-UNFCCC climate financing mechanisms. The overall observation is that once non-UNFCCC climate financing mechanisms emerged and the more they were justified using the UNFCCC, the global response to the climate change problem was fatally wounded through a procedural derailment of UNFCCC objectives. This article calls for a review of non-UNFCCC with the aim of divesting them of the profit factor which in this case is the problematic.

Climate change is the key issue confronting humanity today. In addition to raising the specter of looming ecological disaster, it is also the fundamental human development issue of our time. The impacts of climate change will be transferred to human communities in lopsided proportions with the maximum costs transferred to the poorest and the most vulnerable. Evidently then, fighting poverty and fighting the impacts of climate change have a strategic linkage which needs to be explored for effective policy making. Climate change and human development are locked in dialectic, with changes in one affecting the other. Thus many adverse effects of climate change can be forestalled by focusing on development, and this focus can reciprocally help fighting the causes of climate change. The global climate change regime overseen by the United Nations Framework Convention on Climate Change (UNFCCC) is a complex governance mechanism, with responsibility to coordinate climate change action among states. The global solution to the perils of climate change has crystallized in the form of two competing strategies, mitigation and adaptation, with the former aimed at the causes and the latter at addressing the effects of climate change. Since the developed countries have a disproportionately large carbon footprint, mitigation would not succeed without a cooperative framework involving commitments from all advanced industrialized countries. Meanwhile, the socioeconomic costs will continue to be borne by the less developed countries who must adapt to alleviate the impacts. Closer analysis suggests that current global efforts are biased in favour of mitigation at the cost of adaptation which is more germane to human development. Understanding the reasons for this bias is the key to understanding the mystery surrounding global inaction on adaptation and thus development. This article critically explores the history and functioning of the international climate regime to discover these reasons. The second component of a critical analysis is of course the exploration of alternatives towards positive action. Therefore, an evaluation of the potential of 'microfinance' as a strategy for financing adaptation is also a part of this study. Finally, the employment of microfinance as a strategic approach for adaptation efforts at the societal level is conceptualized with the dual aim of creating employment opportunities and thus poverty alleviation, as well as mobilizing the vast human resource currently neglected in the global discourse on climate change. 2