Climate Funds Update: Where the (public) money is

10/02/2017

Resource:  Climate Funds Update

Type:  Free

Published by:  ODI / Stiftung Heinrich Boll

Note:  Technical terms are marked with a * and explained in the Glossary


Charlene Watson, Research Associate, ODI

There are over 20 major multilateral funds dedicated to climate change action. 9 focus solely on mitigation (most of these being REDD* funds), 6 solely on adaptation, with the other 7 covering both.  These funds have had just under $30 billion pledged to them over the last decade.

These funds represent a significant element of the promised flow of funds from the developed to the developing world. Now though $30 billion is nowhere near the amount that will be needed when NDC implementation gets into full swing, used as a lever for other sources of finance this public funding can generate multiples of the raw dollars in the funds themselves.

We suspect, however, that many countries are not yet accessing funding that is available to them, so we turned to Charlene Watson, Research Associate at the ODI and one of the team that maintains the Climate Funds Update (CFU), for a tour around the CFU website, the most comprehensive information source on these often quite complex climate funds.

(You might want to have the website open at this point…)

Where to start

Charlene suggests the first stop is the Resources tab, under which there are 13 short briefings, in Spanish and French as well as English, on different aspects of climate finance, the Climate Finance Fundamentals. These include thematic and regional briefings and a note on the design of the Green Climate Fund. “Briefing No 2, which covers the global architecture of climate finance, is a good place to start,” Watson says, “because it tells you where the international public finance for climate change is coming from, and it gives a very quick, short overview of the sources of finance.  The thematic briefings – on adaptation, mitigation and REDD – tell you which funds are engaged, who is receiving money and what kind of projects are being funded under each of these headings.  The GCF briefing tells you what’s happening with its risk appetite, its results framework, the forward agenda.”

Another useful starter text, especially for people looking to understand the broad policy context for climate finance, is the “10 Things You Need To Know About Climate Finance” note.  The note reports, for example, the predicted 60% increase in public climate finance by 2020, and shows how climate funds are beginning to diversify the types of instrument they use, in addition to the traditional grants and concessional loans, and to increase spending on projects that meet both adaptation and mitigation objectives.


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To find out what is being funded by country, you are directed to the Data tab.  “In the tables on this page you can filter for a country, a region, a theme, or even a particular fund, to see where the money from that fund is going,” Watson says.  She suggests that one particularly useful approach for countries might be to identify how their peers are doing, and where they are attracting finance from:  “There should be some scope for peer learning there.”

Some countries may be missing out

There are indeed some surprises in this data.  Not a surprise at all is that India and Brazil lead the country recipients of funding, but even though it is the current COP president, it’s perhaps unexpected to find Morocco a close third.  Looking just at adaptation finance, Bangladesh has been the most successful country in attracting this, but Niger – with about one tenth of its population and probably far less institutional capacity – comes second. (In part, Watson notes, this reflects the differing nature of the funds countries are accessing. India, Morocco, Bangladesh and Niger are all engaged with the Climate Investment Funds of the World Bank, providing larger sums of finance (often concessional loans) to fewer countries, whereas other funds manage greater geographic coverage but smaller spending per project.)

Not all highly vulnerable countries are doing as well, though – Namibia, El Salvador and Guatemala, for example, have all received less than $30 million each from the multilateral climate funds, again suggesting that there is much to be learned between countries.


A few things you may not know about the climate funds
  • There has been an increasing trend in funding projects that have both adaptation and mitigation objectives. In particular, both the Green Climate Fund and the Global Environment Facility Funds have increased their funding for such integrated projects.
  • It is not only developed countries that are contributing to the multilateral climate funds; Brazil, Chile, China, Colombia, India, Indonesia, Mexico, Mongolia, Pakistan, Panama, Peru, South Africa and Vietnam, are both recipients and contributors of climate finance.
  • Sub-national actors are also contributing to multilateral climate funds. At COP21 in Paris, over $6 million was pledged by Quebec, Paris and Wallonia, for example, to the UNFCCC funds.

Another useful tab in the climate finance recipients table that Watson points to is the project level data.  “This can help provide a handle on what scale of finance a country should be looking for in any given type of project, and which funds might be most likely to provide the finance for that particular project type.”

Analysis

All of the data on the CFU is downloadable, so users can analyse it any way they wish to, but some basic data cuts are also provided under the Analysis tab.  “So looking for example at the regional trends analysis for Sub-Saharan Africa, you can see that it’s the Least Developed Countries Fund that has been the biggest provider of funding to these countries, followed by the Clean Technology Fund.”  The analysis data is refreshed every six months, though Watson notes that the multilateral fund data is typically more complete than the bilateral fund data due to the more frequent and formal reporting standards of the multilaterals.

A consistent theme in interviews for NDCi.global has been the importance of matching policy to finance flows, and for policy-makers Watson suggests the Executive Summary and Chapter 8 on enabling frameworks in the ODI’s overall report on the effectiveness of climate funds.

Fund Details

The final tab Watson points to for those with the practical aim of finding funding for projects is the Funds page, which provides essential data on the funds, including eligibility criteria, how to access the fund, its decision-making process and so on. “So for example,” Watson says, “if you want to find the most up-to-date listing of the GCF’s accredited entities, you can find that by clicking on the GCF entry in the funds list”.

Watson encourages users to get in touch with the team.  “You can contact any of us via the About Us page on the site, and we will be happy to answer any questions we can, or help people pull out the data that’s useful to them.”

While funding for the update service is secure for the moment, Watson says that they are seeking finance to improve the ‘visitor experience’ to the site and deepen the analysis.  Meantime, it remains a key tool for anyone looking to understand key public sources of climate finance, and we believe it repays some time in familiarisation with the various resources on offer.


Would you be interested in a webinar on how to use the CFU site? Get in touch and let us know.

4 thoughts on “Climate Funds Update: Where the (public) money is

  1. Thank you very much Watson and your team for this illustrative and informative production.Quite useful stuff for disseminating Climate finance fundamentals information even to lay people. Keep up the good work . However , i have a question about the link established between NDCi and Sustainable Development by putting them in a same agenda . How could you calculate the Social Return On Investment (SROI) for such a adaptation or mitigation project knowing well that there are long term projects in this very difficult financial context?

    1. Thanks for your comment Henri – calculating the social returns to investment would be interesting indeed. At the moment the impact measured by the multilateral climate funds is hard to define. This is partly because methods are not clear and in some cases not well defined (each has their own results framework). The link between climate action and SDGs is increasingly recognised, however, as are the solutions that must be financed. There is increasingly a need to establish such impact pathways. Our report goes some way to collect evidence of impact, but falls short of being able to calculate ROI (see section 5 https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/9359.pdf). See also our recent work on financing the future that provides an intro into how we might link financing between SDGs, the Paris Agreement and World Humanitarian Summit outcomes (https://www.odi.org/sites/odi.org.uk/files/resource-documents/11228.pdf)

      1. Thank you Charlene for the insightful response . I am already connected to the link to familiarize with this topic . Cheers!

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