Climate finance

Written by Robert Watt

Friday, 03 November 2017 00:00

climate finance event promo COP23

Side event: Climate finance experiences across SIDS regions

11 November, 10:45-11:45, Fiji Pavilion, @Bonn Zone

This event explores the experiences of small island developing states (SIDS) in accessing climate finance. Participants will include representatives from the Organisation of Eastern Caribbean States, the Secretariat of the Pacific Environment Program, the Government of Antigua and Barbuda and the Republic of the Marshall Islands.

Climate finance: is it working?

Under the United Nations Framework Convention on Climate Change (UNFCCC), countries have agreed on a global target to mobilize US$ 100 billion per year by 2020 for developing countries to tackle climate change, and to scale this up over time.

Although this has generated interest and facilitated the allocation of resources, information on what money has been spent where is mostly generated by donor countries. What’s more, climate finance is complicated – it involves donors, intermediaries, funds, and different type of partnerships.

Given these complexities, it remains unclear for many developing countries how much, what, and in which form international climate finance is supporting climate action. Answering these questions is the starting point for assessing the effectiveness of the international climate finance support.

distribution of climate finance among small island states in the CaribbeanThe distribution of climate finance among small island states in the Caribbean between 2010 to 2015.

SEI’s research has been trying to untangle the complexities of climate finance and answer these fundamental questions about whether climate finance is working. We have focused on Small Island Development States (SIDS), because of their particular vulnerability, and because most existing information on climate finance for SIDS is regionally aggregated (i.e. grouped as Asia and the Pacific, or Latin America and the Caribbean), which makes it difficult to understand the experiences of individual countries.

Our analysis provides an overview of the financial flows that are being mobilized for the SIDS, and provides the foundation upon which to make strategic decisions about how finance should be used, and how its impacts should be evaluated. It also provides the basis for dialogue with bilateral development partners and multilateral climate funds.

What does the research show?

flows of climate finance to small island developing states in the CaribbeanSEI analysis showing the flows of climate finance to small island developing states in the Caribbean.

  • Bilateral climate finance has represented the main source of funding for SIDS both in the Pacific (72% ) and the Caribbean (84%). The role of dedicated climate funds is likely to increase, in particular as a result of the operationalization of the Green Climate Fund (GCF) (our data analyzed flows up to 2015, when the GCF had yet to approve its first project).But bilateral funding remains crucial and more flexible.
  • Climate finance has supported the development of climate related policies, especially in ‘classic’ climate related sectors (e.g. Energy, Agriculture, Water, and Disaster Risk Reduction). However, climate finance is not always connecting with the broad range of sectors that are considered by developing countries as sectoral priorities for climate change. This compromises country ownership, and ultimately effectiveness.
  • Disbursement for climate finance seems to be more challenging when compared to standard development finance. For example, in some Caribbean countries, disbursements of climate finance is less than 10% during 2010–2015, whereas the rate for other aid flows is 95%.
  • More reliable and more accurate data is needed. Modifying and improving the data so that it is complete, robust and timely is crucial for decision-making in SIDS.

Climate Finance in the Caribbean report»

Climate Finance in the Pacific report»