On April 11^th the US hosted a Ministerial Meeting on Mobilizing Climate Finance. Climate Funds Update users may be interested in WRI’s analysis of key issues to address.

The Climate Funds Update data is now current as of March 2013.

Since November 2012, countries have pledged and deposited money in a number of climate funds. The UK has pledged USD 147 million to the Clean Technology Fund and deposited USD 101 million. Sweden also made a new contribution to the Scaling-Up Renewable Energy Program for Low Income Countries of USD 26 million, and additional contributions to the Adaptation Fund (USD 15 million) and to the Least Developed Countries Fund (USD 17 million).

Most climate funds have approved new projects, particularly for adaptation:

·       The Pilot Program for Climate Resilience approved USD 121 million for 7 new full size projects (using both loans and grants) and 4 new preparation grants Mozambique, Tajikistan, Yemen, Grenada. Additional projects in Cambodia and Nepal were approved, as well as one regional project across Asia and the Pacific. The two biggest projects by funding focus on building climate resilience to transform hydro-meteorological services and adapt to climate related hazards.

·        The Least Developed Countries Fund approved USD 50 million in grants for 9 new adaptation projects in Burkina Faso, Congo, Equatorial Guinea, Malawi, a second project in Mali, Sudan, Vanuatu and Yemen. Two of these are focussed on enabling women to adapt to climate change and build resilience. The GEF Trust Fund - Climate Change focal area (GEF 5) approved USD 37 million in grants for 12 new projects in different countries. These include renewable energy projects (e.g. rural electrification in Ecuador, solar photovoltaic energy in Iraq, and geothermal power projects in Djibouti) as well as energy efficiency, including low carbon development in Brazilian cities.

Please contact the Climate Funds Update team with any questions or for further information.

This piece was written by Charlene Watson of the Overseas Development Institute.

Since 2007, parties to the UNFCCC have been discussing the design of a registry of Nationally Appropriate Mitigation Actions (NAMAs). This Registry would match developing country actions with possible sources of international financial support. Such a matching function may be difficult to realise, as funders rarely ‘shop’ in such a way for projects, but the emerging NAMA Registry proposal and protocol could improve the transparency of financial support for climate change mitigation.

What value can the registry add?

NAMAs take on many forms, but are broadly defined as a set of country-driven, sustainable development-compatible actions aimed at reducing emissions. The intention of the Registry is to compile developing country NAMAs in order to match them with developed country support through a web-based platform. This support might take the form of technological capacity or assistance, direct mitigation actions, or finance. The Registry has the potential to provide information on developing countries’ climate finance needs and whether such needs are being, or can be, met. Such transparency can foster trust between developed and developing countries in the UNFCCC process to deliver fair and effective outcomes

A number of climate finance tracking initiatives already exist, including our ODI-HBF Climate Funds Update. Climate Funds Update monitors finance from pledge to disbursal in 23 of the dedicated public climate funds and initiatives. Other initiatives track Fast Start Finance, finance for reducing emissions from forestry activities, and climate finance flowing through national budgets. Such initiatives provide crucial data on where climate finance is going and to what activities. They also help monitor whether developed countries are meeting their collective pledges to mobilise US$ 30 billion between 2010 and 2012 and the longer term objective of making available US$ 100 billion a year by 2020.

NAMAs recorded in the Registry won’t necessarily sum to the total cost of mitigation activities in any given country, but will provide one insight into how much and what type of finance is needed by developing country governments. In doing so, the Registry would go beyond other climate finance tracking initiatives.

However, it remains to be seen how the NAMAs already submitted to the UNFCCC (now totalling close to 50), and also recorded in the Ecofys NAMA database, will be integrated in the Registry, as these are not necessarily seeking international financial support. There are also questions about how the Registry will reflect information on finance delivered through other forms, such as through developed countries’ biennial reports on action.

But so far, engagement with the registry has been limited

In August 2012, the UNFCCC Secretariat requested parties to submit NAMAs to be included in a prototype Registry.

Three countries have submitted information on NAMAs seeking preparation support. Mali has requested US$ 40,000 support each for preparation of two NAMAs for energy efficiency and renewable energy, and  forestry, respectively (both note that capacity building and technical support is also needed). Ethiopia has requested US$ 400,000 for support for preparation of an interurban electric rail NAMA. Uruguay’s three requests for sustainable housing, low emission agricultural technology and wind energy NAMAs amount to US$ 1,675,000.

Two NAMAs have been submitted seeking support for implementation: Chile seeks a US$7.5 million grant for implementation of a national forestry and climate change strategy, while Uruguay has requested a US$2 million grant for integrating photovoltaic solar energy into the national grid. Three more NAMAs have been submitted for recognition. All submissions have requested grant finance, and so far the Registry contains information from only four countries.

No submissions on support for NAMAs have been received from developed countries: a sticky issue for recent negotiations in Doha.

Will the Registry be a useful addition to the international climate policy architecture?

Commitments were made in Doha to have a fully operational prototype by April 2013, on which comments will be invited. Participation in the Registry is voluntary and there are minimal requirements from Parties on information submitted. Developed country incentives to engage with the Registry are unclear. Its function in practice as a clearing house for information on NAMAs, and in improving the transparency of climate finance, remains to be seen.

To have any impact in improving the transparency of action and support, greater engagement with the design of the registry is needed. This would ensure that it presents information that helps us understand finance needs and assess the impact of supported programmes. Those institutions and individuals already involved in tracking climate finance may have useful insights to share on these practical challenges.

As Qatar prepares to host COP 18, decisions on how to deliver and channel finance to help developing countries respond to climate change will again be on the agenda. Climate finance is mobilized in the context of UNFCCC principles that recognize countries common but differentiated responsibilities to act to address climate change. Despite fiscal pressures, we see some encouraging signs that countries are delivering public climate finance in this year’s series of Climate Finance Fundamentals.

Climate Finance Fundamentals are based on data from Climate Funds Update, a joint initiative of the Overseas Development Institute (ODI) and Heinrich Böll Stiftung (HBF), which monitors climate funds from the stage when donors pledge funding through to the actual disbursement of financing for projects.

In 2012, 1.2 billion dollars of climate finance has been pledged. The total volume of climate finance pledged through the 23 dedicated public funds we monitor on CFU now amounts to $29.8 billion.

Between 2003 and 2012, $7.28 billion has been pledged to finance mitigation activities. About $5.61 billion of this pledged amount has been deposited to the designated funds. The volume of finance approved for REDD+ activities increased by about $120 million in 2012,  adding to the $ 1 billion total approved for REDD+ activities. Disbursement of finance continues to be slow.

Since 2003 only 15% of climate finance approved for projects has gone to finance adaptation. But support is growing. This year $556.3 million was pledged to finance adaptation activities, bringing the total since 2003 to $2.73 billion; of this, about $2.23 billion has been deposited.

The total amount approved for projects in sub-Saharan Africa has increased by $300 million since 2011. Of the total climate finance channeled to sub-Saharan Africa, 56% supports mitigation activities, while adaptation projects receive 28% of funding in this highly vulnerable region.

Climate finance for the Middle East and North Africa, the host region for this year’s COP, has increased by 5% in 2012. Egypt and Morocco, however, receive 80% of the total approved climate finance.

The Latin America and the Caribbean region continues to receive the most REDD+ funding, with a total of $598 million approved for projects.

$2.27 billion has been approved for projects in the Asia –Pacific region since 2003. This year alone, $735 million was approved for new projects. Of the total, a full 67% supports mitigation activities.

How is this finance channelled? The global climate finance architecture is multifaceted. Some finance is spent through multilateral funds – such as the Global Environment Facility and the Climate Investment Funds. But a large share of public climate finance is spent bilaterally, administered by existing development agencies such as Japan’s JICA and the US Agency for International Development (USAID). Some countries, notably Brazil and Indonesia, have set up their own national climate change funds. Their objective is to establish funds with high levels of accountability that can finance projects that reflect national circumstances and priorities.

It is also necessary to consider the social dimensions of climate finance. There is evidence to suggest that women are disproportionally affected by climate change impacts. As a result, global interest in options to strengthen the linkages between gender equity and climate change finance has increased.

There is an expectation that the Green Climate Fund (GCF) may help to fill some of the gaps in the current climate finance architecture, especially when it comes to more adaptation finance for vulnerable countries. The precise volume of finance to be channelled through the GCF remains unclear, although it could potentially manage tens of billions of dollars per year over time.

The Climate Funds Update data is now current as of September 2012. Highlights from this update include:

$160 million has been pledged and deposited to the Global Climate Change Alliance (GCCA), since September 2011, an increase of nearly 70%. This increase comes mainly from EC budget and from the EC Fast Start Finance. The GCCA is a European Commission-led initiative that provides technical and financial support to help developing countries integrate climate change into development. 

CFU data displays a substantial increase in adaptation finance over the last three months.

The Least Developed Country Fund (LCDF) has approved 23 new projects. The new projects support adaptation to climate change in Sub-Saharan Africa, Asia and the Pacific. $33 million has been allocated to eight early warning system projects across Sub-Saharan Africa that will help rural communities plan for droughts and floods.

The Pilot Program for Climate Resilience (PPCR) has approved 14 new adaptation projects of approximately $90 million. The largest project ($30 million), funded mainly through concessional loan, is the Coastal Climate Resilient Infrastructure Project in Bangladesh, to be implemented through the Asian Development Bank.

Please contact the Climate Funds Update team with any questions or for further information.