Wednesday, 6 December 2017

SDG Knowledge Hub/Adam Fishman: A number of tangible financial pledges and commitments announced during the 2017 UN Climate Change Conference (COP23)

SDG Knowledge Hub
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Adam Fishman
Thematic Expert for 2030 Agenda for Sustainable Development (US)
4 December 2017
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SDG Knowledge Weekly – 4 December 2017
UN Photo/Eva Fendiaspara
story highlights

The Overseas Development Institute launched a publication series on climate finance fundamentals and a working paper on decentralizing climate finance, while IIED unpacked “devolved” climate finance.

The Stockholm Environment Institute examined climate finance in Caribbean and Pacific SIDS.

In addition, UNDP launched a report on financing the SDGs in the Asia-Pacific region, while a joint UN Environment report looked at China’s greening of the financial system, and OECD, Eurodad, Center for Global Development and Devex all zoomed in on blended finance.

A number of tangible financial pledges and commitments were announced during the 2017 UN Climate Change Conference (COP23), and the thought leadership space also has been abuzz with new reports on, and analyses of, climate and development finance. Publications featured in this week’s ‘SDG Knowledge Weekly’ unpack climate financing impacts in small island developing States (SIDS), global investment, climate-related financial disclosures, transparency and carbon pricing.

The Overseas Development Institute’s (ODI) climate finance publication series orients readers to the world of climate finance over the course of nearly a dozen briefing papers, outlining the global financial architecture, key principles and instruments, as well as funding needs and actual amounts. Briefs cover adaptation, mitigation and forest protection, among other topics. In addition to overviews by topic, the series offers a regional approach, dedicating individual papers to Asia, Latin America, sub-Saharan Africa, the Middle East and North Africa, and SIDS. These location-specific briefings offer insight as to distinct activities, barriers and threats to climate finance in the respective geographies.

The Stockholm Environment Institute (SEI) also examined climate finance in SIDS. Looking at the Caribbean, SEI analysis finds that a total of US$1.477 billion in climate finance was committed between 2010 and 2015. Of this amount, “the vast majority” was provided by bilateral sources, and 62% was provided in the form of grants. The funding was categorized as 48% for mitigation activities, 32% for adaptation, and 20% for both. The authors note that some areas likely to be “critical for long-term resilience,” such as health and education, have not received any climate finance.

In the Asia-Pacific region, SEI’s analysis of Pacific SIDS finds that from 2010-2014, US$748 million in climate finance was committed, almost entirely as grants. Compared to Caribbean SIDS, the ratio of adaptation to mitigation appears to be tilted towards adaptation: 59% of climate finance in the Pacific SIDS is for adaptation (versus 32% in the Caribbean), whereas 36% is for mitigation. Only 5% is counted as both. SEI examines the distribution between adaptation and mitigation, as well as by sector, and features valuable country data analyses in the annex.

At the national level, the Government of Colombia and partners launched a portal and tracking system for climate finance monitoring, reporting and verification (MRV). A World Resources Institute (WRI) blog walks users through the platform, and indicates ways for other countries to learn from Colombia’s experience and improve climate finance data aggregation and analysis.

Delving into the delivery of climate finance at national and local levels in East Africa, ODI released a paper titled, ‘Decentralising Climate Finance: Insights from Kenya and Ethiopia.’ The authors focus on experiences with sub-national County Climate Change Funds (CCCFs) in Kenya and the national Climate Resilient Green Economy (CRGE) facility in Ethiopia, paying special attention to how well these funds respond to local needs vis-à-vis national policies and development plans. The report’s key messages pair well with those of an International Institute for Environment and Development (IIED) report released in March, titled, ‘Delivering Real Change: Getting international climate finance to the local level.’ The report features results from Kenya and Bangladesh, and offers complementary findings to the ODI and SEI papers, particularly with respect to enablers of—and barriers to—local climate finance. In channeling funds to those who need it most, IIED and partners have convened an alliance to examine and test mechanisms for devolved climate finance.

On China, the International Institute of Green Finance (IIGF) of China’s Central University of Finance and Economics (CUFE), and UN Environment’s Inquiry into the Design of a Sustainable Financial System released a report titled, ‘Establishing China’s Green Financial System.’ The report notes that China is increasing its influence via international cooperation at multiple levels, and is “striving to establish a more extensive and universal infrastructure framework” for the development of global green finance to achieve the SDGs and other international agreements. Further SDG Knowledge Hub coverage is available here.

At the regional level, the UN Development Programme’s (UNDP) Regional Bureau for Asia and the Pacific launched the report titled, ‘Financing the Sustainable Development Goals in ASEAN,’ with the People’s Republic of China and Association of Southeast Asian Nations (ASEAN). The publication highlights recommendations for countries on strengthening “the policies and institutional structures that govern their approach to finance,” and details specific steps to “mobilize and maximize the impact of finance on the SDGs.” A UNDP press release is available here.

At the intergovernmental level, the UN Department of Economic and Social Affairs’ (DESA) Financing for Development Office convened the High-level Conference on Financing for Development and the Means of Implementation of the 2030 Agenda for Sustainable Development from 18-19 November 2017, in Doha, Qatar. Under the theme, ‘From country initiatives to global advances – mobilizing financing for sustainable development,’ the gathering aimed to identify challenges in advancing financing for the SDGs, as well as country-level innovations that can address them. The programme notes that the conference served as a preparatory event for the 2018 UN Economic and Social Council (ECOSOC) Forum on Financing for Development Follow-up (FfD Forum) and the 2018 session of the UN High-level Political Forum on Sustainable Development (HLPF).

The Organisation for Economic Co-operation and Development (OECD) published a Policy Perspectives paper titled, ‘Blended Finance: Mobilising resources for sustainable development and climate finance in developing countries.’ Drawing on the upcoming 2018 report, ‘Making Blended Finance work for the SDGs,’ and the OECD DAC Principles on Blended Finance, this paper outlines how blended finance can help bridge the estimated US$2.5 trillion investment gap for delivering the SDGs in developing countries. For those interested in diving deeper into this topic, a webinar on ‘OECD Principles on Blended Finance’ is being held 11 December 2017.

Also with respect to blending, the Center for Global Development’s Paddy Carter considers the role of development finance institutions (DFIs), their strategies, and “transformative” ideas in a blog on the direction of DFIs vis-à-vis the private sector. Devex also featured a piece on how multilateral development banks (MDBs) can unlock private finance for development, authored by Asian Development Bank (ADB) President Takehiko Nakao.

However, not all are fully onboard with the idea of blended finance, particularly as it relates to the 2030 Agenda’s clarion call to “leave no one behind.” Eurodad’s Polly Meeks offers her take in a paper titled, ‘Mixed messages: The rhetoric and the reality of using blended finance to ‘leave no-one behind’.’ Meeks highlights that, without safeguards in place, blended finance is on a course to leave marginalized women, persons with disabilities, and other disadvantaged populations behind. A related blog by the author is available here.

On the lending side, HSBC launched a new bond based on the SDGs, and USAID announced a new development impact bond. The Climate Bonds Initiative reported the passing of the US$100 billion milestone for green bond issuance. This marks a global record for capital flows, and reveals trends and inertia in the finance world, as eyes now turn to US$1 trillion by 2020.

Discussion of these issues will continue in many fora, workshops and other venues in the coming months. Most immediately, Climate Finance Day 2017 will convene on 11 December, in Paris, France, to take stock of climate action in the financial sector since the Paris Climate Change Conference (COP 21). The following day, French President Emmanuel Macron will convene the One Planet Summit, which will discuss further action on climate, notably on the financial front.

related events

    Climate Finance Day 2017
    High-level Conference on Financing for Development and the Means of Implementation of the 2030 Agenda for Sustainable Development
    One Planet Summit
    UNFCCC COP 23

SDGs
13. Climate Action17. Partnerships for the Goals
Issues
Islands, Climate Change, Adaptation, Mitigation, Monitoring & Evaluation
Global Partnerships
Means of Implementation, Finance, Systemic Issues, Data, Monitoring & Accountability
Actors
UNFCCC, UNDP, UNEP, OECD, International Financial Institution, Intergovernmental Organization, Multilateral Environmental Agreement Body, UN Programme, Agency or Fund, National Government
Actions
Publication
Regions
Africa, Asia, Latin America and the Caribbean, Near East, Northern America, Caribbean, South America, Eastern Africa, North Africa, SIDS, Caribbean, Pacific, Eastern Asia, Southern Asia, Western Asia
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