Climate Finance

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When it comes to financing climate mitigation and adaptation measures, the central question in international climate negotiations is how to provide 100 billion USD on a yearly basis from 2020 onwards. As adelphi’s work on the issue shows, however, this is not the only interesting question by far.

+++ On 12 December 2014, Transparency International and adelphi organised the COP20 Side Event "Tools for Climate Finance Readiness: Building Capacity to Support Increased Finance Flows". Watch this video for a summary. +++

Decision-makers in the political and economic sectors are tasked with finding transparent, responsible, and efficient means of climate financing. These should be implemented in such a way that transformation processes can be developed with regard to low-carbon and climate-resilient societies. In line with this, a yearly funding amount of 100 billion USD has been discussed since the Copenhagen Climate Change Conference in 2009. This funding would start in 2020 in order to support climate mitigation and adaptation measures.

Since then, representatives from governments, the private sector and civil society have been asking the following questions: where will the money come from, to whom will it be distributed and under what conditions, and most importantly, for which measures will it be used? The answer to these questions is complex, because a multi-layered grouping of different international funding sources already exists. Further complicating the issue, there is also a plethora of access modalities, funding priorities and usage requirements. On top of this, the recently established Green Climate Fund (GCF) in Songdo (South Korea) will set particular expectations for supporting climate mitigation and adaptation measures. It is currently still unclear, however, how exactly funds can be requested from the GCF. Being able to navigate the complex web of climate finance is thus becoming key to successfully implementing climate mitigation and adaptation projects.

How can governments and the private sector contribute to climate finance?

adelphi has been active in climate finance in a variety of ways for many years. Our involvement in different projects, in which we analyse national structures for climate finance, means that we are active contributors to international knowledge building and sharing. As a result, adelphi is engaged on a number of levels and is able to offer clients and partners specialised, conceptual and methodological skills. These include policy analysis, consulting for companies and government representatives, as well as tailored training opportunities.

One project in particular, for the Climate and Development Knowledge Network (CDKN), has analysed how institutional structures for climate finance in individual countries such as Vietnam and Indonesia can be formed and included in national budgets. The country studies put a particular focus on the legal and institutional frameworks, planning and implementation measures, engaging the private sector, and measures for Good Financial Governance.

In 2014, adelphi developed the Climate Finance Readiness Training (CliFiT) Toolkit as a comprehensive and innovative means of gathering information and methods. This in turn helps to introduce decision-makers, skilled personnel from government ministries and organisations, as well as NGOs, to the challenges and opportunities of climate finance in a systematic way. CliFiT will help to supply an overview of the available financing sources and entry requirements for the Green Climate Fund and to use the raised funds effectively in order to finance national climate mitigation projects. The CliFiT training toolkit was developed with financial support from Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) under the framework of the CF Ready Programme on behalf of the German Federal Ministry of Development and Economic Cooperation (BMZ). Further information can be found on the project’s website.

adelphi presented this approach during the climate negotiations in Lima (COP20) as part of the side event "Tools For Climate Finance Readiness". The event was jointly organised by Transparency International and adelphi and was committed to efficient methods and instruments for climate finance. Learn more with this summarizing report or this event video.

Furthermore, in order to ensure sustainable economic growth, it is important to develop and fund innovative products and business models that protect resources and also improve basic amenities and services for the population. To this end, adelphi has been guiding and supporting a KfW Development Bank project since March 2013, in order to establish a credit line with the Small Industries Development Bank of India (SIDBI). The credit line will fund innovative and resource-efficient businesses and start-ups.

Ultimately, and as part of the development of different climate mitigation instruments, climate financing is a multi-sectoral undertaking which therefore impacts adelphi’s entire climate portfolio – ranging from the development of Nationally Appropriate Mitigation Actions (NAMAs) in the traffic and waste sectors (which adelphi is currently supporting on behalf of the GIZ) to the conception of adaptation measures in the private sector.

Media coverage:
» ThomsonReuters, "Can climate finance be a policy game changer?" (Article)
» IISD, event video (video)

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