Search

Relying on complex interdependence as a theoretical approach, this paper investigates the hypothetical damage that the U.S. withdrawal from the Paris Agreement could represent for Africa in terms of climate finance. In June 2017, President Donald Trump publicly declared the U.S. intention to withdraw from further participating in the multilateral Paris Agreement. To keen followers and analysts of the U.S. climate policy beyond its borders, such unilateral action was never a surprise. Rather, it is nostalgic of the experience of the Kyoto Protocol, particularly how more or less similar move unduly prolonged the global climate negotiations up till late 2015 when the Paris Agreement came about. Although the Paris Agreement is remarkable as it represents the first states-wide climate deal, it however left a number of issues unresolved. Notable among which is climate finance which has remained the most contentious and of critical concern to developing countries, particularly in Africa. Pitted against the fact that Africa contributes less to climate change and, ironically, the hardest-hit by the phenomenon, the U.S. withdrawal from the Paris Agreement aggravates concerns around climate finance and, indeed, portends additional burdens for a continent that is still struggling to cope with the untoward fallout of climate change. [ABSTRACT FROM AUTHOR]

Multilateral development banks (MDBs) are increasingly supporting climate change mitigation efforts. However, little is known about how and why this role in climate finance has evolved, and how MDBs are managing this change internally. This paper addresses these questions through an analysis of energy support provided by the Asian Development Bank (ADB). The paper maps trends in the number and monetary value of ADB energy projects and technical assistance activities, presenting descriptive statistics on five categories of energy between 2000 and 2014. The results indicate that ADB while decreased its support for fossil fuel interventions, this sector continues to enjoy substantial funding support. At the same time, support for sustainable energy projects has also increased, reflecting the Bank's evolving priorities and providing a rough proxy for its entry into the climate finance system. These new insights enhance understanding of the changing dynamics of multilateral climate finance and its complex relationship with development finance institutions. Given their financial resources and policy influence, it is essential for MDBs to support the goals of the new global climate finance architecture. But to be considered a serious actor in the climate finance system, ADB has to revisit its policy architecture, strengthen its accounting procedures, and coordinate its efforts with those of other actors across this fragmented system. [ABSTRACT FROM AUTHOR]

Finance ministries are increasingly involved in UN climate finance negotiations, yet this development received very limited attention in the literature on climate finance or climate negotiations. It is not obvious from the literature on bureaucratic politics how these ministries will position themselves on climate finance: they may frame climate finance as expenditure to be limited or as an instrument for correcting the market failure of climate change. This paper investigates which frames have characterised the positions of finance ministries on key issues in the climate finance negotiations, and whether the use of a given frame corresponds to particular factors. Case studies of Denmark, India, Indonesia and the USA based on official documents and interviews show that the position of each finance ministry is generally consistent with one particular frame. The Indonesian and Danish finance ministries predominantly framed climate finance as a way of correcting a market failure. The Indian Ministry of Finance emphasised Common but Differentiated Responsibilities, which fits with the budget frame. The US Treasury's position similarly fits with the budget frame while sharing elements of the market failure frame. Finance ministries that had the lead on climate finance were more likely follow the budget frame. The use of both frames cuts across the divide between industrialised and emerging economies. With the exception of the USA, left- and right-wing governments were equally likely to adopt either frame. These findings indicate that strengthening finance ministry forums built around the market failure frame can be a way of reducing norm fragmentation. [ABSTRACT FROM AUTHOR]

The fulfilment of wealthy countries' commitment to mobilise $100 billion a year in climate finance by 2020 will hinge on maintaining domestic political support in contributor countries. Predictability in flows of climate finance is likely to enhance the overall stability of the climate finance system and the broader climate regime. However, at present it remains unclear how the 2020 target will be achieved and little is known about what drives fluctuations in support among contributor countries. This article explores domestic and international factors that may explain fluctuations in national support through a case study of Australia's climate finance from 2007 to 2015. Drawing on documentary analysis and interviews with officials and stakeholders, the paper tracks two domestic factors that may influence support for climate finance-the government's political orientation and public concern about climate change-and two international factors-commitment to multilateral agreements and international peer pressure. While some accounts view climate policy choices as being driven primarily by domestic factors, we find that the government's political orientation on domestic climate policy and aid explains some but not all variations in Australia's stance on climate finance. International peer group effects have moderated the positions of two governments that were otherwise reluctant to act on climate change. National policy reforms combined with improved multilateral oversight and more established replenishment cycles could bolster support in contributor countries and thereby strengthen the capacity of the climate finance system. [ABSTRACT FROM AUTHOR]

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'. [ABSTRACT FROM AUTHOR]

In order to meet long-term climate change mitigation objectives, emissions cuts are required in all regions across the globe and in all sectors, including transport. In financing this effort, the Clean Development Mechanism (CDM) and the Global Environmental Facility (GEF) are until now the only international climate policy instruments under the United Nations Framework Convention on Climate Change that provide incentives for emissions reductions in developing countries. More recently, the Clean Technology Fund (CTF) was established. In this paper, we show that the impact of these financing instruments on transport has been very limited, due to methodological difficulties, a data-intensive monitoring process and the limited funding available. We argue that the transport sector is not likely to play a significant role in the continuation of a carbon credit offsetting scheme, unless these methodological requirements are simplified and significantly more funding is available. In the post-2012 climate regime, there may be substantial international funding available in addition to existing credit schemes and international funds, which could be channeled through nationally appropriate mitigation actions (NAMAs). This can provide new and better opportunities for sustainable transport in developing countries. We propose a framework for NAMAs, including types of policies and measures, measurement, reporting and verification of the actions, and an institutional and financial structure. We conclude that climate funding needs to be aligned closely with domestic and multilateral development finance flows in order to make a difference for sustainable transport. [ABSTRACT FROM AUTHOR]

International climate funds play a key role in supporting the adaptation policies of Small Island Developing States (SIDS) to climate change by reducing their vulnerability. The mechanism of contributions established at national level under the Paris Agreement of 2015 lays the foundations to help international donors better understand each country's climate needs. With this in mind, this paper aims to provide some policy suggestions emerging from the analysis of the impact some variables have on reducing vulnerability. To this end, we consider the vulnerability index of 33 SIDS countries in terms of adaptation and mitigation policies. Based on the data availability, we use the panel-corrected standard errors estimator in time span from 2010 to 2014, taking into account the spatial heterogeneity of vulnerability. Our findings display that foreign aid and social development variables are crucial to promoting adequate and balanced responses to climate change. Therefore, we can confirm the effectiveness of external funds in reducing vulnerability. Domestic resources alone do not appear able to help SIDS due to endogenous limits of countries beneficiaries. The approach proposed in this paper can be extended to other small countries which are not islands, as well as to islands that are not nations. [ABSTRACT FROM AUTHOR]

Tens of billions of US dollars are programmed from developed to developing countries to assist them in dealing with the impacts of climate change or to reduce greenhouse gas emissions. This is the world of climate finance, a stream of money which includes public funding set to swell to $100 billion yearly by 2020. These sums conceal agenda-setting stories on how different countries are coping with climate change. Drawing on data analysis and interviews with beneficiaries of climate finance, this article examines local and adaptation funding as two entry points into the field, connecting different perspectives on climate finance. [ABSTRACT FROM AUTHOR]

Over the past decade developed states have committed significant public financing for climate change adaptation. Much of this public financing flows through international development organizations. States have delegated the implementation and monitoring of adaptation to existing international organizations such as the World Bank, the United Nations Development Programme, and the Organisation for Economic Co-operation and Development. Scholars have noted that states delegate discretion to specialized organizations to perform a task on their behalf, but have not explored how uncertainties about the nature of the task affect delegation. This article addresses this gap by distinguishing the concept of epistemic ambiguity (when states are uncertain about the exact nature of a task) from strategic ambiguity (when states do not reach consensus over a task due to political differences) in order to address the question: how have states and international organizations defined and implemented adaptation activities? The question is answered through case studies of: (1) adaptation projects administered by the United Nations Development Programme and the International Organization for Migration in Kenya; and (2) states' and international organizations' attempts to develop methodologies for reporting adaptation financing. The case studies are based on: primary documents published by states and international organizations, secondary literature on climate finance, and interviews with adaptation experts. This article argues that states have not precisely defined adaptation, and that this is substantially due to epistemic ambiguity. It then identifies two consequences of epistemic ambiguity: a proliferation of activities labelled as adaptation, and difficulties tracking and monitoring adaptation assistance. [ABSTRACT FROM AUTHOR]

The Paris Agreement commits nations in Article 2(1) to 'Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.' However there is an absence of internationally agreed accounting rules that would permit overall assessments of progress to this goal and any meaningful comparisons of performance between countries. This is true also for the quantitative Copenhagen/Cancún promise by developed nations to jointly mobilize US$100 billion by 2020. Our goal is to provoke discussion about the depth of the problems this lack of a functional definition and accounting system have created and perpetuated. We do so by describing the fragmented system of national reporting of climate finance and how the OECD's Rio Marker system is serving neither contributors nor recipients. More than a trust issue between developed and developing countries, we argue that the lack of modalities to account for climate finance also considerably impedes the effective functioning of the bottom-up approach that now prevails under the UNFCCC. The deadline to propose "modalities of accounting climate finance" by 2018 is a crucial window in which to address this chronic issue in international climate policy. [ABSTRACT FROM AUTHOR]

Nepal, a least-developed, mountainous, and land-locked country is consistently ranked as one of the most vulnerable countries to the climate change. Poor socioeconomic development, rough and highly unstable geography, inadequate institutional capacity to deal with research, development and policy and mostly underdeveloped infrastructures, all have contributed to increasing vulnerability of communities and ecosystems, and have limited their adaptive capacity. Over the past decade, Nepal has made significant progress, particularly in developing and implementing policies and frameworks and establishing institutional mechanisms with the support of donor countries, UN and multilateral agencies. As the global climate politics is getting more complicated, international financing patterns—both climate and development finance—are shifting their ways, forcing the countries like Nepal to diversify the funding base for climate change actions and integrate them within national development plans and strategies. Using the data and information currently available, we analyze the existing financing situations, discuss the future scenarios and suggest policy recommendations to develop a set of long-term adaptation and impact mitigation strategies in specific and environmental change at large. When short-term adaptation strategies funded from existing financial arrangements and other related bilateral and multilateral sources particularly European countries, seem to be encouraging, we stress the need of "public–private partnership-driven full-fledged green economy" focusing on renewable energy and transport, agriculture and forestry, water and water-induced disasters, as well as tourism and hospitality. [ABSTRACT FROM AUTHOR]