On 6 July 2016, ECDPM's Hanne Knaepen gave a presentation on “climate financing challenges” at the 3rd Meeting of the EU-Africa Network of Economic and Social Stakeholders, organised by ECOSOC in Nairobi.

1. Dr. Hanne Knaepen
6 July 2016
Challenges to climate
finance

2. Outline
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1
• The global climate finance architecture
2
• A closer look at the Green Climate Fund (GCF)
3
• Key challenges for effectiveness
4
• The way forward

3. 1. The global climate finance architecture
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4. 1. The global climate finance architecture
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Source: OECD, 2014.
Climate
finance
sources
Public sources
Development
bank-type
instruments
Carbon
markets
Private capital

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1. The global climate finance architecture (cont.)
• 1991, Global Environment Facility (GEF)
• 2009, Adaptation Fund (AF)
• 2011, Green Climate Fund (GCF)
Multilateral
• Germany, International Climate Initiative
• UK, International Climate Fund
• Norway, International Forest Climate Initiative
Bilateral
• Regional: African Risk Capacity (ARC), Caribbean
Catastrophic Risk Insurance Facility
• National: Benin National Fund on Climate Change,
Mali Climate Fund
Regional and
national

6. Page 6ECDPM Source: www.climatefundsupdate.org
1. The global climate finance architecture (cont.)

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1. The global climate finance architecture (cont.)
• COP21: first COP with one full day on agriculture
• Increasing climate financing for agriculture
• 2012: Adaptation for Smallholder Agriculture Programme (ASAP), IFAD
• Largest global financing source dedicated to support adaptation for
smallholders so they can access information tools and technologies that
help build resilience.
• Special objective: enable smallholders to benefit from climate finance.

8. 2. A closer look at the Green Climate
Fund (GCF)
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9. 2. A closer look at the GCF
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Key features?
• 2010 (Cancun COP): developed countries’ commitment to mobilise 100 billion
USD annually by 2020 for climate action in developing countries (Initial pledging
goal of 10 billion USD: reached);
• Main channel to solve complexity of climate finance;
• Board: 50/50 representatives from developed and developing countries;
• Balanced finance between adaptation and mitigation (50/50);
• Key role private sector;
• Risk-management framework;
• Recipients submit proposals through Nationally Designated Authorities;
• Wide accreditation potential.

10. 3. Key challenges for effectiveness
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11. 3. Key challenges for effectiveness
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1. No internationally agreed definition of climate finance + lack of transparency;
1. Most climate funding to emerging countries, not to the poorest;
1. Funds are inflexible and risk averse;
1. Structure of climate financing is fragmented + bureaucratic;
1. Funds lack inclusivity;
1. How to implement?

12. 3. Key challenges for effectiveness (cont.)
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Three key challenges for GCF
1. Benefits and rights of the poorest are not addressed directly and clearly in
the Results Framework.
1. 50/50 split, but will the Nationally Designated Authorities (NDAs) prioritise
adaptation? And, how to encourage the private sector to invest in
adaptation?
1. Will subnational institutions and stakeholders (farmers!) have free and fair
access to funding and to decision-making of the NDAs?

13. 4. The way forward
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4. The way forward
How to trigger
trillions, not
billions?
How to
implement the
NDCs in an
innovative way?
How to ensure
inclusivity?
How to ensure
transparency?

15. 4. The way forward
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3 guiding questions for discussion:

16. Thank you very much.
www.ecdpm.org
hk@ecdpm.org
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