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UN guide aims to help poor states access climate finance
14 September 2011
LONDON (AlertNet) - A growing number of developing states are setting up national funds to support their climate change activities, which should help them obtain a larger share of international financing and use it more effectively, according to the author of a new U.N. guidebook aimed at assisting those efforts.
At the 2009 Copenhagen climate summit, donor governments pledged to channel $30 billion in funding to nations vulnerable to the impacts of climate change between 2010 and 2012, rising to $100 billion a year by 2020. Other sources of climate finance have proliferated at the same time.
"We want everyone to be able to access these funds, and really optimise their use of them," Cassie Flynn, a climate change policy specialist with the U.N. Development Programme (UNDP), told AlertNet in an interview. "We want the scope of this (money)...to be as far-reaching as possible, and get to the countries that really need it."
UNDP estimates there are now more than 50 international public funds, 45 carbon markets and over 6,000 private equity funds providing billions of dollars for national climate change actions.
Between 2009 and 2010, investments in the clean-energy sector worldwide grew 30 percent to a record $243 billion, according to UNDP. But only around one-tenth of the money went to the least-developed countries, small island developing states and other nations outside the Group of 20.
Fast-developing economies in the G20, such as China and Brazil, have been much more effective at tapping into international climate finance than poorer nations.
The UNDP publication, launched on Wednesday, is a step-by-step guide to setting up national climate funds and is aimed at helping developing-country decision makers take better advantage of the billions pledged to tackle climate change.
"The requirements, processes and reporting associated with the many funds can be confusing and overwhelming," says the guidebook. "Countries are faced with the challenge of how to identify which funds are appropriate for them, how to coordinate the actions funded by them, and how to develop the methods to monitor and evaluate the results."
Countries also need to find ways to blend money together so that multiple financing sources can support their priority climate change initiatives in an efficient way, the guide adds.
The guidebook features examples of national climate funds that are up and running in Brazil, Indonesia, China, Bangladesh and Ecuador. Flynn said there are at least 20 more such funds being planned around the world.
A number of African countries are hoping to launch national funds in the next year or so, she added, and Central and South American nations and island states in the Pacific and Caribbean are also considering doing so.
STRENGTHENING GOVERNANCE
For a long time, governments focused heavily on how much money they would need to deal with the effects of climate change, Flynn said. But more recently they have realised they must be well prepared to spend it, particularly as work progresses on a fledgling U.N. Green Climate Fund.
"Countries are starting to think about, ‘How can we be ready for this?’" she said. "How can we be first in line? How we can make sure we have all these things in place to access those funds quickly?"
Setting up a national climate fund is not a prerequisite for accessing international finance, she emphasised. But doing so can be useful for overcoming internal barriers - such as a lack of expertise, or poor communication between ministries - as well as external concerns over where and how the money is going to be used.
"If people (donors and civil society) know where the funds are sitting, how they are channeled, and then there are specific criteria for how the funds are monitored, reported and verified, I think that goes a long way towards transparency," Flynn said.
The guidebook, "Blending Climate Finance through National Climate Funds", draws on UNDP's experience in setting up, managing and advising 750 funds around the world, and providing services for over $5 billion in contributions pooled from donors.
"Through national climate funds, countries can access more financing and accelerate their response to climate change," Olav Kjorven, UNDP's director of development policy, said in a statement. "This can be a major contribution to setting the world on a cleaner, more equitable and sustainable path."
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