Gaia has partnered with the Overseas Development Institute to look closely at climate finance. Tracking climate finance flows will help patch significant knowledge gaps, monitor climate finance more efficiently as well as mobilize and direct funding. The project is funded by the Nordic Council of Ministers and will be completed by November 2013.
So far industrialized countries have committed to mobilize 100 billion dollars of long-term climate finance annually to address climate change and its consequences in developing countries by 2020. Obviously this is only a fraction of the funding required, as the total cost of addressing climate change in developing countries is estimated to range from 0.6 to 1.5 trillion dollars per year.
It is widely agreed that private climate finance needs to contribute a substantial share of the total. The central challenge, however, is mobilizing sufficient amounts of funding and ensuring that private finance contributes positively to climate resilient low-carbon development.
“Currently, we do not have consistent and transparent methodologies to track climate funding flows. This makes it even more challenging to figure out the most effective ways to increase private climate finance. And we must not forget that the public sector plays an essential role in providing climate finance but also in establishing a suitable enabling environment to attract private funding, be it through public policies, regulation or various types of resource injections“, says project leader Mikko Halonenfrom Gaia.
Gaia and the Overseas Development Institute will therefore take a thorough look at the climate finance landscape. The project aims to clarify definitions and approaches as well as showcase practical methods for assessing private climate finance flows to developing countries.
The project is part of a Research Collaborative of governments, research institutions and finance institutions coordinated and hosted by the OECD Secretariat.