Adaptation

This paper examines the challenges of monitoring financial flows related to climate change. The first part focuses on tracking, monitoring, and reporting various types of flows, primarily from official development assistance (ODA) and other public sources but also from private sources. The second part explores possible ways of tracking additionality in ODA flows, with the aim of stimulating global discussion on this issue.

The World Bank Group at Work illustrates through a range of examples how public finance can catalyze climate action by piloting innovative ways to leverage both climate and development finance, such as combining resources and instruments to maximize synergies, exploring new opportunities to expand the scope for market mechanisms, and strengthening the capacity to facilitate access to resources and their effective use.

This document focuses on the ramp up of financing requirements for developing countries over the 2010-20 period and assesses the role carbon markets and public finance can play in meeting that requirement.

The first section clarifies the financial needs and challenges that the global community must address to achieve emissions reductions and support adaptation measures.  This section also includes succinct definitions of key terms used in describing the institutional architecture.  The second section summarizes the principal elements of the two predominant architectural proposals: the first is the contributing or developed country proposal and the second is the developing or recipient country proposal. Those two proposals represent polarized options at the time of this writing.

The commitment to provide new finance in support of climate change actions in developing countries was one of the few areas where tangible progress was made at the Copenhagen COP meeting. In light of this, securing a system that supports such financial flows to developing countries is an immediate challenge for the international community. This paper examines Europe’s approach to the provision of such finance.

The report gives an overview of environment and climate change financing. It discusses the roles of public and private sector, the role of financial markets and the management, allocation and delivery of finance. Furthermore, it also discusses the role of development cooperation in relation to climate change and other environmental financing. Finally, it presents recommendations for Swedish development cooperation.

The working paper is of  high relevance to negotiators in the context of climate change finance under the UNFCCC and to countries seeking financing for their low-carbon growth and adaptation strategies. It also informs the debate of "new and additional" and the future role of bilateral financing institutions under UNFCCC article 11.5.