COP27: let us remember the obvious about climate finance
As COP27 draws to a close, let us remember the obvious: implementing the Paris Agreement will require financial flows from developed to developing countries. However, these flows are not just the much discussed $100 billion a year promised by the nations of the North to their counterparts in the South – a promise that has not been kept to date. And they are not just about budgetary flows either. More fundamentally, the architecture of development financing – or at least its climate component – needs to be reviewed in depth. It is therefore primarily the mission and modus operandi of the multilateral banks, and more broadly of the public development banks, that must be reviewed.
The challenge is clear: to increase the “climate” impact of public development banks. How can this be done? First, by increasing their lending or investment capacities. Secondly, by improving their ability to combine their operations with private financing. It is a second obvious fact: most of the financing for the transition, in the North as in the South, will come from the private sector. But also – and above all – by making them evolve from their historical logic of project financing to a logic of financing the structural changes necessary for a rapid and orderly transition. The attention of public development banks must therefore now turn to the construction of ambitious public policies to implement national climate strategies; to the parallel construction, by countries, of financing plans for climate strategies; to the financing of national financial institutions, able to contribute to the financing plan; and to support national financial regulators.
The I4CE team was there and organised or contributed, with its international partners, to a number of events to talk about this. You will find in this newsletter some of these replays.
Financing the transition in developping countries
You want to know more about the financing issues developing countries face to tackle climate change, from mobilizing significant budgetary resources to redirecting public finance flows or aligning their financial system. You want to listen to experts and practicioners and their ideas of reforms ? The replay of this I4CE event is for you.
Rethinking development banking in the Decade of Delivery
It is now clear that Development Finance Institutions face many limitations to support the transition of developing countries, as highlighted by the Expert Panel tasked with the review of Multilateral Development Banks for the G20. This event, organized by the OECD, IDFC and I4CE as Secretariat of the Mainstreaming Initiative, focus on these limitations and how to adress them.
Agligment of financial institutions with the Paris Agreement objectives
In order to maximize their impact, Development Finance Institutions engage with national governments, central banks or their financial intermediaries for the alignment of local financial markets. To discover how they do so, watch the replay of this event organized by I4CE as Secretariat of the Mainstreaming Initiative.
Domestic climate finance mapping and planning
Monitoring public and private climate investment patterns is essential for countries to asses their progress, and to identify investments needs and develop financing strategies. However, gaps exist in tracking and reporting such flows. Find out more watching the replay of this event organised by CPI, UNDP et European Forest Institute.
Implementation of long-term strategies
How to effectively engage finance ministers and private sector in the implementation of Long Term Strategies? To answer this question watch the replay of this event organised by I4CE and IDDRI.
Planning for the transition
The climate transition requires such significant structural shifts and the coordination of so many actors that there is a general consensus on the need to develop transition plans. As well as coordinated financing strategies. How to do so ? I4CE, ADEME and Iddri have shared their ideas during this COP27 event.
All replays of events organised by the Maintreaming Initiative and its partners will soon be available on the Initiative’s website.