Today, developed countries released a “Roadmap” for how they will mobilize climate finance between now and 2020. This critical funding will help developing countries build low carbon and climate resilient economies and is an integral part of the Paris Agreement since countries reinforced their commitment to mobilize $100 billion annually from 2020 to 2025.
As a part of the Paris Agreement, developed countries agreed to develop a “roadmap” to outline how they plan to meet the objective of mobilizing $100 billion per year by 2020. This roadmap and the accompanying analysis from the Organization for Economic Cooperation and Development (OECD) provides much needed clarity on the status of current funding amounts and expectations of whether developed countries are likely to meet the 2020 finance commitment. This report builds on the climate finance assessment completed last year by the OECD and CPI. This roadmap is the first look at how the world will reach this goal.
The OECD report finds that by 2020, developed countries are expected to have mobilized $91 billion of climate finance (see figure). The OECD estimates that the 2020 total climate finance could range between $90 billion and 92 billion depending on how effective public finance is in mobilizing private finance. As a comparison, the overall total for mobilized public and private finance in 2014 was $62 billion. The OECD analysis predicts that the $100 billion goal will be reachable for 2020, thanks to increased leverage ratios for private finance. Here are a few key points of the Roadmap:
Public finance will increase to $67 billion by 2020, from about $41 billion in 2013-2014—an increase of $26 billion from the current levels. This takes into account the pledges made in 2015 and assumptions about climate finance from countries that have not made pledges—so the OECD considers theirs a conservative estimate. (A list of national and OECD pledges can be found in the Roadmap.)
Mobilized private finance is predicted to be $24 billion in 2020. Depending on how effective the public finance is in mobilizing private finance, the OECD estimates that the values could be higher or lower than this amount (with a range of $22.8 – 25.5 billion).
Public finance for adaptation is on-track to double by 2020 from current levels. This would mean funding for adaptation in 2020 would be around $14 billion—an increase from $7 billion in 2014. This is important positive momentum towards ensuring that greater resources are provided to help the most vulnerable address the impacts of climate change and become more resilient.
The sources of funding going towards the $100 billion target are varied, including direct bilateral funding from country to country, multilateral development finance, export credits and funds from the Green Climate Fund. The significant increase in financing is a result of new pledges by developed countries and multilateral development banks in 2015.* The OECD report estimates that the majority of the funding will flow through bilateral funding from developed countries ($37.3 billion), followed by funding from the multilateral development banks and other multilateral channels ($29.5 billion) and leveraged private finance ($24 billion).
Developed countries outlined the kinds of initiatives that will help them reach the $100 billion target. These initiatives will mean increased support for the Least Developed Countries Fund, Green Climate Fund and the Adaptation Fund. Specific adaptation initiatives include open access to satellite data and computer models to plan for future climate impacts, support for development of National Adaptation Plans, programs for resilience, early warning systems for extreme weather events, and access to risk insurance. Mitigation and cross-cutting initiatives will cover an array of projects for clean energy deployment and large-scale investment.
The Roadmap released today outlines the path forward to show that climate finance is starting to be scaled-up both in the public and private sectors. It will be critical that developed countries ensure delivery of this finance and continue to scale-up up low-carbon and climate resilient economies.
The pathway to low-carbon and climate-resilient growth has never been clearer.
Here is the list of countries and MDBs that provided new climate finance pledges in 2015:
Countries: Australia, Austria, Belgium, Bulgaria, Canada, Czech Republic, Cyprus, Denmark, European Commission, Estonia, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Netherlands, New Zealand, Norway, Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, United Kingdom, and United States.
MDBs: Asian Development Bank (ADB), African Development Bank (AFDB), European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD), Inter-American Development Bank Group (IDBG), and the World Bank Group (WBG).