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🔳 🚀 "DOUBLING OF ADAPTATION FINANCE" 📈 – A Submission to the Report of the Standing Committee on Finance, 📒 by Timo Leiter (Author). The Centre for Climate Change Economics and Policy & The Grantham Research Institute on Climate Change and the Environment. July 2023 _______   THE SUBMISSION FOCUSES ON THREE KEY ASPECTS: [A.] Methods for Measuring Adaptation Finance Outcomes; [B.] Effectiveness of Adaptation Finance; and [C.] Key Opportunities to Double Adaptation Finance. It includes 14 KEY MESSAGES for consideration.   Examples of these messages are: 1️⃣ Tracking finance as an input to the adaptation process is distinct from measuring its results. Accounting of financial flows cannot be taken as a proxy for effective adaptation; 2️⃣ There is no one-size-fits-all approach to measuring adaptation results. The suitability of monitoring and evaluation (M&E) methods and approaches depends on the purpose, intended audience and available resources for M&E; 3️⃣ Instead of aiming for a universal set of global portfolio indicators, it is more important to ensure the quality of each adaptation project, especially to specify in detail how activities are expected to help people adapt; 4️⃣ Adaptation finance can only be effective if it is genuinely addressing climate risks; and 5️⃣ To close the adaptation finance gap it is indispensable to establish new funding sources that deliver substantial and predictable funds that are less prone to changes in national administrations.   📑THE PAPER https://lnkd.in/efT9eYHK ✅   ✏ THE AUTHOR TIMO LEITER is a PhD candidate at the Grantham Research Institute on Climate Change and the Environment. He is a lead author of UNEP’s Adaptation Gap Report and a contributing author to the Intergovernmental Panel on Climate Change (IPCC)’s Sixth Assessment Report, Working Group II on Impacts, Adaptation and Vulnerability.   🏰 THE INSTITUTIONS The Centre for Climate Change Economics and Policy (Hosted by the University of Leeds, and the London School of Economics and Political Science / The Grantham Research Institute on Climate Change and the Environment (The London School of Economics and Political Science). _______

Climate Finance Update: OECD Report 2013-2021 The latest OECD report on Climate Finance (2013-2021) provides a comprehensive analysis of progress towards the USD 100 billion goal. Developed countries played a pivotal role in addressing climate challenges, and here are some key takeaways: Scope and Components: The report captures four components of climate finance, including bilateral and multilateral public finance, climate-related export credits, and private finance mobilized by developed countries. Progress Towards Goal: In 2021, developed countries provided and mobilized USD 89.6 billion, marking a 7.6% increase from the previous year. Despite this progress, the total fell short of the USD 100 billion annual goal. Components Analysis: Public climate finance (bilateral and multilateral) dominated, nearly doubling from USD 38 billion in 2013 to USD 73.1 billion in 2021. Climate-related export credits increased by 28% over 2013-2021. Mobilized private climate finance, though returning to 2019 levels at USD 14.4 billion in 2021, displayed an overall stagnation since 2017. Climate Themes and Sectors: The report highlights growth in climate finance for mitigation, adaptation, and cross-cutting categories. Mitigation continued to lead, representing 60% of total finance. Energy, transport, agriculture, forestry, and fishing were key sectors targeted. Public Finance Instruments: Developed countries primarily used loans (USD 49.6 billion) and grants (USD 20.1 billion) to provide public climate finance. The report suggests a need for tailoring interventions to better attract private finance. Recipient Countries: Lower middle-income countries (LMICs) were the main beneficiaries, receiving 43% of total climate finance. Least developed countries (LDCs) and small island developing countries (SIDS) also received notable support. Opportunities Ahead: The report concludes with opportunities for international climate finance providers to enhance effectiveness, particularly in mobilizing private finance and addressing adaptation needs. For more detailed information, refer to the full OECD report: https://lnkd.in/dpNr23bA #ClimateAction #Sustainability #FinanceForChange #climatefinance

💵In 2021, total climate finance provided and mobilised by developed countries for developing countries amounted to USD 89.6 billion, showing a significant 7.6% increase over the previous year. This increase is significantly higher than the 2.1% average annual growth observed from 2018 to 2020. However, this result remained USD 10.4 billion short of the USD 100 billion annual goal, that was to be reached by 2020. 💵Public climate finance (bilateral and multilateral) almost doubled over the 2013-21 period, from USD 38 billion to USD 73.1 billion, accounting for the vast majority of the total USD 89.6 billion in 2021. 💵Adaptation finance dropped by USD 4 billion (-14%) in 2021, resulting in a decrease in its share of total climate finance from 34% to 27%. At the same time, cross-cutting finance, increased from USD 6 billion in 2020 to USD 11.2 billion in 2021. 💵🌎Mobilised private climate finance, for which comparable data are only available from 2016, amounted to USD 14.4 billion in 2021, or 16% of the total. Source/Credit:- OECD (2023), Climate Finance Provided and Mobilised by Developed Countries in 2013-2021: Aggregate Trends and Opportunities for Scaling Up Adaptation and Mobilised Private Finance, Climate Finance and the USD 100 Billion Goal, OECD Publishing, Paris, https://lnkd.in/dJZeCW9N. https://lnkd.in/dhbB9m8D #climateaction #climatechange #climatefinance #climate #development #ldcs #developingcountries OECD - OCDE

They say numbers do not lie but so is failing to have an agreed upon definition for Climate Finance, as much as it is a "Constructive Ambiguity" some of the quoted figures bellow can be disputed by experts within developing countries themselves who have means of verification. Bellow is an excerpt from the report. "The 2022 climate finance data shows that public funds, from both bilateral and multilateral channels, continue to make up the bulk of climate finance, accounting for 80% of the total. Over the period recorded, multilateral public climate finance showed the biggest rise, up by USD 35 billion or 226% since 2013. The 2022 growth in public climate finance was accompanied by a jump of 52%, or USD 7.5 billion, in mobilised private finance, which reached USD 21.9 billion in 2022 after several years of relative stagnation" "Climate finance to low-income countries remained relatively low at 10% in 2022. Importantly, however, least developed countries (LDCs) and small island developing states (SIDS), benefitted from a larger amount of finance for adaptation (about 50%) than the average for all developing countries (25%). On the other hand, private mobilised finance for LDCs and SIDS was very limited, underscoring the need for tailored international support to help address the challenges faced by these countries in attracting private investment for climate action" OECD - OCDE GCF ForumCiv https://lnkd.in/dwP9QDPS

🚨 New Research Article: The Economic Case for Climate Finance at Scale 🚨 As UN Secretary-General António Guterres stated on June 5, 2024: “May 2024 was the hottest May in history, marking twelve straight months of record-breaking temperatures... We are not the dinosaurs. We are the meteor. But we are also the solution.” My new paper, co-authored with Patrick Bolton and Jeromin Zettelmeyer, "The Economic Case for Climate Finance at Scale," presents a solution to our climate crisis. 🌍✨ https://lnkd.in/dbkMzfdA 🔍 Key Insights: - Advanced countries need to focus on decarbonizing Emerging and Developing Market Economies (EMDEs). - Timely and at-scale climate finance is both equitable and in the economic interest of advanced nations. - Financing EMDEs’ decarbonization can largely be achieved through capital markets, once de-risked. 💡 Why This Matters: The climate crisis knows no borders. Even if the West decarbonizes on schedule, global emissions driven by EMDEs can lead to catastrophic outcomes. Climate finance at scale by advanced countries for EMDEs is not charity – it's enlightened economic self-interest. Investing in climate finance now can prevent immense future damages and migration crises. Climate finance by advanced countries to developing nations has been framed as the equitable thing to do due to historical emissions and greater wealth. However, moral arguments alone have only managed to secure $100 billion annually, far short of the trillions needed. Economic incentives are a much stronger impetus for action. The economic benefits to advanced countries from avoiding climate damages far exceed their necessary investments into EMDEs. Subsidizing the early closure of fossil fuels in EMDEs is not a handout but an economic bargain to prevent overshooting our carbon budget and catastrophic climate outcomes. With only 23% of greenhouse gases priced, and often below the social cost of carbon (SCC), climate finance within borders and across borders plays a crucial complementary role to carbon taxation. Policies like the Inflation Reduction Act and the Green Deal exemplify the carrot-based approach needed to achieve net zero in time. Our research is the first to make the economic case for climate finance at scale offered by advanced economies to EMDEs for their decarbonization. Our paper highlights the urgency and economic rationale for Western nations to invest beyond their borders, ensuring a just transition and avoiding the "meteor" path. 🌱💸 Eyes on the ball. The climate decisions we make in the next few years, will affect humanity for the next thousands 🌍 . With many thanks to Heather Grabbe, David Kleimann, Ben McWilliams, André Sapir, Simone Tagliapietra, Beatrice Weder di Mauro, Giovanni Sgaravatti, Guntram Wolff, Georg Zachmann and Stavros Zenios for their valuable feedback on the paper. #ClimateAction #ClimateFinance #GlobalEconomy #Decarbonization #EconomicPolicy

Any climate finance study that fails to recognize the impact of bitcoin mining has a *glaring* gap We're financing critical carbon mitigation infrastructure... & it's happening at an accelerating pace: 1. Methane mitigation: widespread global deployment of methane mitigation infrastructure in waste management & agriculture/aquaculture (gas capture, anaerobic digesters, & gensets), as well as more efficient methane flaring infrastructure deployed in oil & gas fields 2. Renewables generation & microgrids. Bitcoin miners are anchor tenants for generation that wouldn’t otherwise exist in rural sites w/out industrial or commercial customers. They provide a predictable revenue stream for transmission constrained renewables in the US, and help get public infrastructure projects over their hurdle rates in Africa 3. Electrification: Heat recovery & heat offtake agreements that promote fuel switching away from fossil fuels towards greener grids for industrial, district, & home heating. Current projects around the world include the city of North Vancouver, shrimp farms & mulitple greenhouses, distilleries, homes, a European hotel, & a NY bathouse Bitcoin mining presents a novel way to subsidize + fund public infrastructure, besides the traditional taxpayers and ratepayer pathways. It's time it's recognized a viable pathway for funding the low carbon transition that continues to be underinvested in & the force of good that it is #climatefinance #methanereduction #innovation #cleanenergytransition #cleantech #bitcoinmining #carbonremoval #climatechangesolutions

This recent study by the Institute for Climate Economics provides a good overview of what is often the most contentious elements of carbon pricing policy: how to spend the money. The analysis covers 30 carbon prices in 27 jurisdictions that together account for 94% of global carbon price revenues. Given that there were 71 carbon pricing instruments in place world wide in 2022 (there are now 74), this says something about the remaining 41 (later in the report, it is highlighted that only 59 of those 71 were revenue-generating). The figures are informative, but I must say the report could have used at least one more round of editing. There are some obvious copy edits that were missed. Further, I’m struggling to see how the numbers implied in Figure C make sense. How can the total percentage of revenues dedicated to climate and nature be greater than the share of either of its parts? Similarly, how can the amount dedicated to the total budget be smaller than in the aggregated share of both ETS and carbon tax regimes? Clearly, a lot of valuable work went into this, but the final product, unfortunately, comes off as rushed.

https://lnkd.in/dZXgwDFQ The Climate Policy Initiatives report on #ClimateFinance in 2023 is a great read. Those who would like a global overview can look at the executive summary which gives an excellent overview and visual representation of the gaps in #AdaptationFinance The full report is also available to download for those looking into a deeper dive. Among many other things, the report highlights that despite the urgent need for adaptation finance, South Asia received only 11% of all adaptation finance in 2021/2022. Developed economies continue to mobilize the most climate finance, primarily from private sources, while South Asia and other developing regions face significant funding gaps. The report highlights that developing countries need USD 212 billion per year in adaptation finance up to 2030, and USD 239 billion per year between 2031 and 2050. This is roughly 3.5 times higher than the USD 63 billion adaptation finance tracked in 2021/2022. The adaptation needs of African countries alone will require roughly USD 52 billion per year until 2030. Given that WMO data finds that we are likely to exceed 1.5 degrees prioer to 2030, pursuit of climate-resilient development is key to address the growing costs of climate change. The report finds that a transformation of the financial system, including reforming international financial institutional systems, is key to tackling the climate crisis. Debt laden countries like ours may shrug at this and say that we do not have the luxury to think about such reforms, faced with the behemoth of financial crises- but is this an opportunity we are potentially missing out on?

The OECD Development report that the we've finally reached the 100 billion USD in climate finance goal -- two years late, but better late than never so good news! Ian Mitchell and Edward Wickstead at Center for Global Development kick the tires of that estimate in a new (highly recommended) report. Three quick takeaways: The good: Yes, we've indeed reached the 100 Billion USD target: 'Combined with our estimates for multilateral ($46.5bn) and bilateral ($44.2bn) public finance, this suggests that we might expect 2022 climate finance to total $106.8bn' The bad: No, it's not because we've increased development and climate finance, 'The overall picture of combined climate and development finance makes clear that donors’ financial effort—expressed as a share of their combined economies (GNI)—has actually fallen since 2009' The ugly: No, the climate finance isn't really 'new and additional' as we promised, 'at least a third of climate finance was funded from existing development budgets’ https://lnkd.in/ducV4ySm https://lnkd.in/dQZc9duM

Has the USD 100 billion climate finance goal been achieved? The question of how much of the USD 100 billion climate finance goal has actually been mobilised by developed countries has always been a topic of fervent debate. In the recent report released by the OECD on 29 May 2024, it was stated that developed countries mobilised USD 115.9 billion in climate finance in 2022, confirming the fulfilment of the USD 100 billion climate finance goal. The release of this report, just ahead of the Bonn Climate Change Conference scheduled from 3 June to 13 June 2024, is expected to catalyse discussions and intensify negotiations. The report further elaborated that public climate finance accounted for close to 80% of the total in 2022, increasing from USD 73.2 billion in 2021 to USD 91.6 billion in 2022. This increase observed between 2021 and 2022 was the most significant recorded in a single year to date, amounting to a 25% rise in relative terms. In 2022, as in previous years, developed countries’ public climate finance provided bilaterally and through multilateral channels mainly took the form of loans (69% or USD 63.6 billion) and, to a lesser extent, grants (28% or USD 25.6 billion). However, concerns still persist regarding the predominance of loans over grants, which further enhances the debt burden on developing countries, blurring the lines of true financial assistance. Developing countries have always raised concerns about the absence of a standardised methodology and a unified definition of climate finance to track the goal, creating doubts about the accuracy, methodological robustness, and verifiability of the reported climate finance figures. As the world stands at a pivotal juncture, with the fate of countless lives and ecosystems hanging in the balance, unified action is imperative. Clear and accurate climate finance reporting is not just a necessity—it is the backbone of global efforts to combat climate change effectively and equitably. #Climatefinance #Climatenegotiations #OECD #Climatechange