Analysis of External Climate Finance Access and Implementation: CIF, FCPF, GCF and GEF Projects and Programs by the Inter-American Development Bank

2021 ◽  
Author(s):  
Sofía Viguri ◽  
Sandra López Tovar ◽  
Mariel Juárez Olvera ◽  
Gloria Visconti
Keyword(s):  
Climate Change ◽  
Scale Up ◽  
Transformational Change ◽  
Lessons Learned ◽  
Climate Finance ◽  
Low Carbon ◽  
Global Environment Facility ◽  
Climate Action ◽  
External Sources ◽  
Resilient Infrastructure

In response to the Paris Agreement and the Sustainable Development Goals (SDGs), the IDB Group Board of Governors endorsed the target of increasing climate-related financing in Latin America and the Caribbean (LAC) from 15% in 2015 to 30% of the IDB Groups combined total approvals by 2020. Currently, the IDB Group is on track to meet this commitment, as in 2018, it financed nearly US$5 billion in climate-change-related activities benefiting LAC, which accounted for 27% of total IDB Groups annual approvals. In 2019, the overall volume and proportion of climate finance in new IDBG approvals have increased to 29%. As the IDB continues to strive towards this goal by using its funds to ramp-up climate action, it also acknowledges that tackling climate change is an objective shared with the rest of the international community. For the past ten years, strategic partnerships have been forged with external sources of finance that are also looking to invest in low-carbon and climate-resilient development. Doing this has contributed to the Banks objective of mobilizing additional resources for climate action while also strengthening its position as a leading partner to accelerate climate innovation in many fields. From climate-smart technologies and resilient infrastructure to institutional reform and financial mechanisms, IDB's use of external sources of finance is helping countries in LAC advance toward meeting their international climate change commitments. This report collects a series of insights and lessons learned by the IDB in the preparation and implementation of projects with climate finance from four external sources: the Climate Investment Funds (CIF), the Forest Carbon Partnership Facility (FCPF), the Green Climate Fund (GCF) and the Global Environment Facility (GEF). It includes a systematic revision of their design and their progress on delivery, an assessment of broader impacts (scale-up, replication, and contributions to transformational change/paradigm shift), and a set of recommendations to optimize the access and use of these funds in future rounds of climate investment. The insights and lessons learned collected in this publication can inform the design of short and medium-term actions that support “green recovery” through the mobilization of investments that promote decarbonization.

IDB Group and Climate Action

2021 ◽  
Author(s):  
Keyword(s):  
Climate Change ◽  
Latin American ◽  
Paris Agreement ◽  
Climate Finance ◽  
Development Bank ◽  
Multilateral Development Banks ◽  
Climate Action ◽  
The Caribbean ◽  
Development Banks ◽  
Bank Group

As one of the leading development partners for Latin American and the Caribbean (LAC), the Inter-American Development Bank Group (IDB Group) is fully committed to lead by example on climate change action. Since the signing of the Paris Agreement, the IDB Group has provided over $20 billion in Climate Finance, amounting to about 60% of all Climate Finance to the region from Multilateral Development Banks (MDBs).

scholarly journals Climate finance and disclosure for institutional investors: why transparency is not enough

2019 ◽  
Vol 160 (4) ◽  
pp. 565-589 ◽  
Author(s):  
Nadia Ameli ◽  
Paul Drummond ◽  
Alexander Bisaro ◽  
Michael Grubb ◽  
Hugues Chenet
Keyword(s):  
Climate Change ◽  
Institutional Investors ◽  
Financial Stability ◽  
Task Force ◽  
Efficient Market Hypothesis ◽  
Inadequate Response ◽  
Climate Finance ◽  
Implicit Assumption ◽  
Low Carbon ◽  
Theoretical Frameworks

Abstract The finance sector’s response to pressures around climate change has emphasized disclosure, notably through the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). The implicit assumption—that if risks are fully revealed, finance will respond rationally and in ways aligned with the public interest—is rooted in the “efficient market hypothesis” (EMH) applied to the finance sector and its perception of climate policy. For low carbon investment, particular hopes have been placed on the role of institutional investors, given the apparent matching of their assets and liabilities with the long timescales of climate change. We both explain theoretical frameworks (grounded in the “three domains”, namely satisficing, optimizing, and transforming) and use empirical evidence (from a survey of institutional investors), to show that the EMH is unsupported by either theory or evidence: it follows that transparency alone will be an inadequate response. To some extent, transparency can address behavioural biases (first domain characteristics), and improving pricing and market efficiency (second domain); however, the strategic (third domain) limitations of EMH are more serious. We argue that whilst transparency can help, on its own it is a very long way from an adequate response to the challenges of ‘aligning institutional climate finance’.

scholarly journals Responding to Climate Change in Tropical Countries Emerging from Armed Conflicts: Harnessing Climate Finance, Peacebuilding, and Sustainable Food

Forests ◽  
2018 ◽  
Vol 9 (10) ◽  
pp. 621 ◽  
Author(s):  
Augusto Castro-Nunez
Keyword(s):  
Climate Change ◽  
Literature Review ◽  
Political Support ◽  
Armed Conflicts ◽  
Climate Finance ◽  
Sustainable Food ◽  
Post Conflict ◽  
Entry Points ◽  
Climate Action ◽  
Intractable Problems

Linking climate action with sustainable development goals (SDGs) might incentivize social and political support to forest conservation. However, further examination of the conceptual entry points for linking efforts for reducing forest-based emissions with those for delivering SDGs is required. This review paper aims to contribute to fulfilling this research need. It provides insights into the links between conserving forests for climate change mitigation and peacebuilding. Specifically, the paper examines opportunities to harness climate finance for conserving forests and achieving long-lasting peace and sustainable food. It does so via a literature review and the examination of the Orinoquia region of Colombia. The findings from the literature review suggest that harnessing climate finance for conserving forests and peacebuilding is, in theory, viable if the activities are designed in accordance with social, institutional, and economic factors. Meanwhile, the Orinoquia region provides evidence that these two seemingly intractable problems are proposed to be solved together. At a time when efforts for reducing forest-based emissions are being designed and targeted at (post-) conflict areas in Colombia and elsewhere, the paper’s findings might demonstrate the compatibility of programs aimed at reducing forest-based emissions with efforts relating to peacebuilding and sustainable food to both environmental and non-environmental government agencies.

scholarly journals CLIMATE FINANCE AND ITS GOVERNANCE: MOVING TO A LOW CARBON ECONOMY THROUGH SOCIALLY RESPONSIBLE FINANCING?

2009 ◽  
Vol 58 (3) ◽  
pp. 597-626 ◽  
Author(s):  
Benjamin J Richardson
Keyword(s):  
Climate Change ◽  
Clean Energy ◽  
Business Case ◽  
Current Approach ◽  
Potential Contribution ◽  
Climate Finance ◽  
Low Carbon ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Low Carbon Economy

Abstract‘Climate finance’ is becoming an important feature of the emerging legal and policy regimes to address global warming. However, the current approach largely confines the financial sector to a transactional agent to mobilise capital for clean energy and to broker emission allowance trading. The sector's potential to leverage more sweeping positive changes in the economy as sought historically through the movement for socially responsible investment (SRI) has been insufficiently acknowledged. Indirectly, by regulating greenhouse gases the legal system is helping to create a business case for investors to respond to climate change threats. However, the potential contribution of SRI to address climate change problems more comprehensively is presently limited owing to inadequate governance frameworks, as well the sector's increasing abandonment of its traditional ethical agenda.

Key Drivers and Barriers for the Mobilization of Institutional Investment in Climate-Related Projects

2021 ◽  
Vol 26 (11) ◽  
pp. 1236-1244
Author(s):  
S. I. Nikulina
Keyword(s):  
Climate Change ◽  
Institutional Investors ◽  
Climate Finance ◽  
Low Carbon ◽  
Financial Policies ◽  
Institutional Investment ◽  
Responsible Investment ◽  
Climate Risks ◽  
Change Projects ◽  
Key Drivers

The presented study focuses on the problem of increasing the participation of institutional investors in climate finance.Aim. The study aims to identify key drivers and barriers for increasing the participation of institutional investors in climate finance.Tasks. The author considers the transformation of the concept of the fiduciary debt of institutional investors; examines international efforts to address climate risks and mobilize institutional investment in low-carbon projects; analyzes factors preventing wider engagement of institutional investors in climate finance.Methods. This study used general scientific methods of cognition, such as synthesis and analysis.Results. The transformation of the concept of the fiduciary debt of institutional investors is described and its modern interpretation is provided. Factors facilitating the consideration of climate risks and increasing the role of institutional investors in climate finance are identified. The main barriers to considering climate change issues in the investment decisions made by institutional investors are identified.Conclusions. Common approaches to financial policies and regulations are being actively developed at the international level to help mobilize institutional investment in climate change projects. Credible international structures in the field of responsible investment, such as PRI, have a significant influence on the way investors address climate-related risks and opportunities when making decisions. Along with the drivers for institutional investment, numerous barriers still remain.

scholarly journals Communicating climate change in a “post-factual” society: lessons learned from the Pole to Paris campaign

2019 ◽  
Vol 2 (1) ◽  
pp. 83-93
Author(s):  
Erlend M. Knudsen ◽  
Oria J. de Bolsée
Keyword(s):  
Climate Change ◽  
Social Media ◽  
Science Communication ◽  
Lessons Learned ◽  
Polar Regions ◽  
Awareness Campaign ◽  
Climate Change Science ◽  
Climate Action ◽  
The Impact

Abstract. The politicization of and societal debate on climate change science have increased over the last decades. Here, the authors argue that the role of climate scientists in our society needs to adapt in accordance with this development. We share our experiences from the awareness campaign Pole to Paris, which engaged non-academic audiences on climate change issues on the roads from the polar regions to Paris and through conventional and social media. By running and cycling across a third of the globe, the scientists behind the initiative established connections on the audiences' terms. Propitiously for other outreach efforts, the exertions were not in themselves the most attractive; among our social media followers, the messages of climate change science and action were more favourable, as measured by video statistics and a follower survey. Communicating climate action in itself challenges our positions as scientists, and here we discuss the impact such messages have on our credibility as researchers. Based on these reflections, as well as those from other science communication initiatives, we suggest a way forward for climate scientists in the post-factual society, who should be better trained in interaction with non-academic audiences and pseudoscepticism.

scholarly journals Overstraining international climate finance: when conflicts of objectives threaten its success

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wolfgang Buchholz ◽  
Dirk Rübbelke
Keyword(s):  
Climate Change ◽  
Sustainable Development ◽  
Policy Instruments ◽  
Policy Coordination ◽  
Paris Agreement ◽  
Climate Finance ◽  
Adaptation To Climate Change ◽  
Global Environment Facility ◽  
Content Type ◽  
Sustainability Problems

Purpose Climate finance is regularly not only seen as a tool to efficiently combat global warming but also to solve development problems in the recipient countries and to support the attainment of sustainable development goals. Thereby, conflicts between distributive and allocative objectives arise, which threaten the overall performance of such transfer schemes. Given the severity of the climate change problem, this study aims to raise concerns about whether the world can afford climate transfer schemes that do not focus on prevention of (and adaptation to) climate change but might be considered as a vehicle of rent-seeking by many agents. Design/methodology/approach Future designs of international transfer schemes within the framework of the Paris Agreement are to be based on experience gained from existing mechanisms. Therefore, the authors examine different existing schemes using a graphical technique first proposed by David Pearce and describe the conflicts between allocative and distributional goals that arise. Findings In line with the famous Tinbergen rule, the authors argue that other sustainability problems and issues of global fairness should not be primarily addressed by climate finance but should be mainly tackled by other means. Research limitations/implications As there is still ongoing, intense discussion about how the international transfer schemes addressed in Article 6 of the Paris Agreement should be designed, the research will help to sort some of the key arguments. Practical implications There are prominent international documents (like the Paris Agreement and the UN 2030 Agenda for Sustainable Development) seeking to address different goals simultaneously. While synergies between policies is desirable, there are major challenges for policy coordination. Addressing several different goals using fewer policy instruments, for example, will not succeed as the Tinbergen Rule points out. Social implications The integration of co-benefits in the analysis allows for taking into account the social effects of climate policy. As the authors argue, climate finance approaches could become overstrained if policymakers would consider them as tools to also solve local sustainability problems. Originality/value In this paper, the authors will not only examine what can be learnt from the clean development mechanism (CDM) for future schemes under Article 6 of the Paris Agreement but also observe the experiences gained from a non-CDM scheme. So the authors pay attention to the Trust Fund of the Global Environment Facility (GEF) which was established with global benefit orientation, i.e. – unlike the CDM – it was not regarded as an additional goal to support local sustainable development. Yet, despite its disregard of local co-benefits, the authors think that it is of particular importance to include the GEF in the analysis, as some important lessons can be learnt from it.

scholarly journals Climate Finance and Its Role towards the Transition to Low-Carbon, Climate-Resilient Development in Ethiopia

2019 ◽  
Author(s):  
Zelalem Dendir
Keyword(s):  
Climate Change ◽  
Sustainable Development ◽  
Climate Adaptation ◽  
Rainfall Variability ◽  
Strong Relationship ◽  
Developed Countries ◽  
Gdp Growth ◽  
Climate Finance ◽  
Low Carbon ◽  
Recent Emergence

Achieving and sustaining stability for economic growth remain the greatest and most immediate development challenge for Ethiopia. For natural resource-based economies especially maintaining stability and growth depends fundamentally upon climate change adaptation and mitigation. The close links between climate and Ethiopia’s economy are reflected by the strong relationship between GDP growth rate and rainfall variability. A study by the World Bank projects that unless steps to build resilience are effective, climate change will reduce Ethiopia’s GDP growth by between 0.5 and 2.5% each year. Along with the challenges posed by climate change, a number of development opportunities are emerging in response to climate change which includes access to international climate finance. The international response to climate change in the form of external development finance plays a key role to support developing countries in their transition to a low-carbon, climate-resilient and sustainable development pathway. Therefore, this study was conducted to assess the flow and the overall contribution of climate finance to sustainable development in Ethiopia. Specifically, focused on outlining how climate finance is currently reconciled in the existing Ethiopian climate change governance and its contribution to sustainable development. In order to achieve these objectives, data were collected from different sources. The Rio Marker methodology applied to review climate financial flow over the 5 year period. The result reveals that, climate change is central to development agendas despite its recent emergence in the mainstream, with various initiatives under way to combat or reduce its impacts in Ethiopia. In addition, the amount of climate finance from the developed countries to Ethiopia shows some fluctuation for the past five years. In general, the overall flow of climate finance mostly targeted climate adaptation actions which spur and enable the transition towards climate-resilient growth and sustainable development.

scholarly journals Climate Solutions Double as Health Interventions

2021 ◽  
Vol 18 (24) ◽  
pp. 13339
Author(s):  
Nicholas A. Mailloux ◽  
Colleen P. Henegan ◽  
Dorothy Lsoto ◽  
Kristen P. Patterson ◽  
Paul C. West ◽  
...  
Keyword(s):  
Climate Change ◽  
Crop Yields ◽  
Health Benefits ◽  
Respiratory Illness ◽  
Low Carbon ◽  
Intergovernmental Panel ◽  
Climate Action ◽  
Vector Borne ◽  
Mitigate Climate Change ◽  
Climate Crisis

The climate crisis threatens to exacerbate numerous climate-sensitive health risks, including heatwave mortality, malnutrition from reduced crop yields, water- and vector-borne infectious diseases, and respiratory illness from smog, ozone, allergenic pollen, and wildfires. Recent reports from the Intergovernmental Panel on Climate Change stress the urgent need for action to mitigate climate change, underscoring the need for more scientific assessment of the benefits of climate action for health and wellbeing. Project Drawdown has analyzed more than 80 solutions to address climate change, building on existing technologies and practices, that could be scaled to collectively limit warming to between 1.5° and 2 °C above preindustrial levels. The solutions span nine major sectors and are aggregated into three groups: reducing the sources of emissions, maintaining and enhancing carbon sinks, and addressing social inequities. Here we present an overview of how climate solutions in these three areas can benefit human health through improved air quality, increased physical activity, healthier diets, reduced risk of infectious disease, and improved sexual and reproductive health, and universal education. We find that the health benefits of a low-carbon society are more substantial and more numerous than previously realized and should be central to policies addressing climate change. Much of the existing literature focuses on health effects in high-income countries, however, and more research is needed on health and equity implications of climate solutions, especially in the Global South. We conclude that adding the myriad health benefits across multiple climate change solutions can likely add impetus to move climate policies faster and further.

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