Climate finance effectiveness

Maximising the effectiveness of climate change finance is an issue of urgency for both the climate change and development communities, focused on finding the best ways to use relatively small amounts of largely public finance to have the greatest possible impact in enabling climate compatible development. Demonstrating the effectiveness of spending on climate change is particularly important in a time of restricted public budgets and competing demands on donor governments. It is also crucial that lessons on effectiveness are taken into account in operationalising the Green Climate Fund.
The Overseas Development Institute (ODI) is analysing the effectiveness of major multilateral climate funds, using a common framework. This page compiles our work in the area.

Effectiveness framework

Reports on the effectiveness of climate change finance

Climate Finance: is it making difference? A review of the effectiveness of multilateral climate funds

International efforts to tackle climate change are at a critical juncture. At the end of 2015 governments will gather at the Paris climate summit to frame a new international agreement aimed at preventing ‘dangerous climate change’. Achieving that goal requires a high level of ambition backed by practical policy commitments. Finance has a pivotal role to play in supporting developing countries to reduce emissions, decarbonise their economies, and adapt to the impacts of climate change. Governments across the world’s poorest countries see financial commitments as key to a global deal in 2015 that can deliver meaningful climate action.

Our new report, for the first time, analyses a decade of contributions and spending to nine major international and two national funds set-up to tackle climate change.

The underlying dataset used for the quantitative analysis of these funds is available here.

The effectiveness of international climate finance

This paper considers the context of delivering climate finance and presents a guiding framework to assess the effectiveness of international climate funds.

The framework identifies ten key and interlinked dimensions (above) that are central to understanding the effectiveness of spending and outcomes of dedicated public finance initiatives that have been established to help countries respond to climate change. the effectiveness of climate funds: synthesis note

This note synthesises the key messages from ODI's series of reviews of the effectiveness of climate funds, listed below. Our hope is that it provides a basis for a more informed debate about the implications of different approaches to delivering climate finance. Over the coming months, we will assess a number of other international funds, and distill lessons from more than a decade of effort to deliver climate finance for efforts to support action on climate change.
The effectiveness of climate finance: a review of the Adaptation Fund

Five years after its establishment, and with the formal financial architecture of the UNFCCC under renegotiation, the moment is right to take stock of the operations and achievements of the Adaptation Fund. This paper reflects on the effectiveness of the Adaptation Fund with consideration for the processes by which it spends money, and the likely outcomes of the funding that has been delivered. effectiveness of climate finance: a review of the Pilot Program for Pilot Resilience

The PPCR has a focus on mainstreaming climate adaptation into national level plans, poverty alleviation strategies and sustainability goals. It has been a game changer for adaptation finance in many ways. Here we reflect on its achievements as well as on areas where progress remains to be made, for instance in deepening national ownership of PPCR supported programmes.
The effectiveness of climate finance: a review of the Amazon Fund

This working paper is the second in  a series of studies of the effectiveness of dedicated climate funds. This paper reviews the Amazon Fund in Brazil. Four years after the operationalisation of the fund, and with the emergence of a portfolio of supported projects, it is useful to reflect on its achievements in practice. effectiveness of climate finance: a review of the Clean Technology Fund 

The experience of the CTF offers important insights into what it takes to use diverse financial instruments at scale to support developing countries to respond to climate change. Its experience reinforces the importance of country context for programmes, and of due attention to issues of institutional capacity and preparedness.
 The effectiveness of climate finance: a review of the Scaling-up Renewable Energy in Low Income Countries Program

The SREP was designed to address a gap in the international climate finance architecture by ensuring that finance is directed to assist low income countries in adopting low carbon energy technologies and using renewable energy to improve energy access. Here we reflect on its early efforts towards this goal.

The effectiveness of climate finance: a review of the Global Environment Facility

The GEF has grappled with many of the questions that confront the international community as it confronts the question of how to design and operate effective international climate funds. It is timely to take stock of its evolving priorities and areas of focus.
The effectiveness of climate finance: a review of the Indonesia Climate Change Trust Fund

The Indonesia Climate Change Trust Fund (ICCTF) is the first national trust fund to seek funding from multiple donors to finance climate change policies and programmes. 

This review seeks to understand the context and evolution of the ICCTF in order to offer insights into the practical realities of establishing national climate change funds. It finds that, while the ICCTF provides an innovative model for countries around the world looking to access international support for their climate change response strategies through nationally driven institutions, its operationalisation has been slow to date. The fund's current capitalisation of US$ 11.4 million makes it a relatively small source of finance in a country that accesses hundreds of millions of dollars of concessional donor support for climate related purposes.