The UN Climate Change Conference in Bonn agreed to a total of 13 finance-related decisions, including that the Adaptation Fund shall serve the Paris Agreement subject to and consistent with decisions to be taken in 2018.
The Adaptation Fund reached its US$80 million resource mobilization goal for 2017 thanks to pledges made at COP 23 by Germany, Sweden, Italy, the Walloon Region of Belgium and Ireland, totaling US$93 million.
COP 23 also saw a number of other funding pledges, and numerous side events, project launches and partnership announcements related to climate finance.
7 December 2017: During the month of November, the 23rd session of the Conference of the Parties to the UNFCCC (COP 23) generated numerous activities and announcements around climate finance, alongside the usual attention drawn by finance-related issues in the intergovernmental negotiations. The Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol decided that the Adaptation Fund shall serve the Paris Agreement, and the Fund reached its annual mobilization target thanks to pledges made at the conference.
COP/CMP Build Momentum on Climate Finance, Decide on Adaptation Fund
COP 23 and CMP 13 agreed to a total of 13 finance-related decisions, including on the report of the Adaptation Fund Board, which decides that the Adaptation Fund shall serve the Paris Agreement subject to and consistent with decisions to be taken at the 2018 session of the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement. According to a press release by the Adaptation Fund, “the decision helps affirm and formalize what the Fund has already been doing to operationalize the goals of the Paris Agreement, which calls for countries to accelerate global action on climate change for the most vulnerable through a balance of adaptation and mitigation.” [COP 23/CMP 13 Decisions] [Adaptation Fund Press Release]
The multilateral development banks (MDBs) made several announcements at COP 23. The Green Climate Fund (GCF) reported it had doubled the amount of approved climate finance during the past year. The GCF also launched the ‘Direct Climate Action Platform,’ an online volunteering platform that will connect interested individuals with GCF National Designated Entities and Direct Access Entities. The African Development Bank (AfDB) launched the ‘Africa NDC Hub’ as the African platform for nationally determined contributions (NDCs), which will aim to serve as a catalyst for concessional funding for climate-related projects in Africa and, consequently, for leveraging private finance. A side event by the European Investment Bank (EIB) announced a tool for mainstreaming climate action by public and private financial institutions, which takes the form of five principles. The UN and World Bank released ‘The Roadmap for a Sustainable Financial System,’ prepared by the UNEP Inquiry into the Design of a Sustainable Financial System and the World Bank, which outlines ways to create a financial system that integrates sustainability considerations. [GCF Press Release on Funds] [GCF Press Release on Action Platform] [AfDB Press Release] [EIB Press Release] [World Bank Press Release] [IISD SDG Hub Story on Financial System Roadmap]
COP 23 Catalyzes Announcements on Adaptation Finance
At COP 23, new pledges to the Adaptation Fund totaling US$93 million came from Germany, Sweden, Italy, the Walloon Region of Belgium and Ireland, which meant the Fund reached its US$80 million resource mobilization goal for 2017. The largest sum came from Germany, the host of COP 23, at €50 million. [Adaptation Fund Press Release]
In other funding news, Germany also pledged €20 million to the International Fund for Agricultural Development (IFAD) to help developing country smallholder farmers adapt to the impacts of climate change and improve food security. Norway and multinational company Unilever announced they will develop a US$400 million fund to invest in “business models that combine investments in high productivity agriculture, smallholder inclusion and forest protection” in order to stimulate more resilient socioeconomic development. The Caribbean Development Bank (CDB) announced a US$14 million contribution to the Caribbean Catastrophe Risk Insurance Facility (CCRIF SPC). The Luxembourg-EIB Climate Finance Platform (LCFP) announced €5 million to support energy efficiency and renewable energy in the Middle East and North Africa Region through the public-private partnership Green Growth Fund. [IFAD Press Release] [UNFCCC Press Release] [CDB Press Release] [EIB Press Release]
Institutional News: COP 23 Sparks Numerous Institutional Partnerships
At COP 23, MDBs and the GCF announced a number of partnerships. The EBRD and the Global Centre of Excellence on Climate Adaptation (GCECA) announced a joint initiative aimed at strengthening the climate resilience of the financial sector, with the first step being a conference in London, UK, in May 2018. The EIB and the German development agency GIZ signed an agreement that will strengthen cooperation between the two entities with a key focus on climate change mitigation, specifically renewable energy projects. [EBRD Press Release] [EIB Press Release]
The GCF launched several partnerships. The World Bank, AfDB, the French development agency ADF and the environmental group WWF all signed an Accreditation Master Agreement (AMA) with the GCF. Also, the UNFCCC-related Climate Technology Centre and Network (CTCN) and the Fund will collaborate to accelerate energy-efficient, low-carbon and climate-resilient development, following an exchange of letters between UNEP (the host of the CTCN) and the GCF. [GCF Press Release on World Bank] [AfDB Press Release] [GCF Press Release on ADF] [GCF Press Release on WWF] [CTCN Press Release]
In other MDB and climate fund institutional news, the Adaptation Fund Board accredited the Agricultural Bank of Niger as the 27th National Implementing Entity (NIE) under the Fund’s Direct Access modality. The GCF announced a Simplified Approvals Process that will simplify applications for certain small-scale projects of up to US$10 million in GCF funding (see also the November 2017 Resources section below). The AfDB Board approved the Bank’s second climate action plan, for 2016-2020, which aims for low-carbon and climate-resilient development in Africa. [Adaptation Fund Press Release] [GCF Press Release] [AfDB Press Release]
COP 23 Side Events Advance Climate Finance Discussions at Practical Level
Numerous side and other events organized at the COP 23 civil society and country/stakeholder pavilion ‘Bonn Zone’ focused on climate finance. Here is a selection of news on events organized by the MDBs, development agencies and climate funds:
- At a side event, GCF Executive Director Howard Bamsey stated that the GCF will “focus on pursuing high-quality climate projects and improving its approval processes.” [GCF Press Release]
- The GCF organized a technical seminar on strengthening the quality and impact of adaptation planning by developing countries with GCF support. [GCF Press Release]
- The UN Development Programme (UNDP) convened a consultation on the GCF Readiness Programme. [GCF Press Release]
- The Adaptation Fund organized a special event to celebrate its ten-year anniversary. [Adaptation Fund Press Release]
- The European Bank for Reconstruction and Development (EBRD) organized events on, inter alia, fiscal risks and opportunities related to a green economy transition, financing for urban climate action, building a market for climate technologies and financial institutions’ work on metrics for climate resilience and adaptation. [EBRD Press Release]
- The Nordic Environment Finance Corporation hosted a discussion mobilizing green investments for smart solutions. [NEFCO Press Release]
- At the COP23 Finance for Climate Day, UNEP Finance Initiative (UNEP FI) drew attention to the ambition gap and the investment gap, calling for all financial players to work together to mobilize at least US$1.5 trillion of climate finance every year. [UNFCCC Press Release]
November 2017 Resources
Suggested reading and other information resources on climate finance by MDBs, climate funds and expert and specialist organizations include:
- A podcast episode on the economic impact of natural disasters in the EBRD’s ‘Pocket Economics’ series [EBRD Press Release];
- A white paper by the Green Finance Committee (GFC) of the China Society for Finance and Banking and the European Investment Bank (EIB) comparing different green bond standards, with an eye on enhancing the consistency of green finance definitions and standards between China and the EU [EIB Press Release];
- A report co-authored by the UNEP Inquiry into the Design of a Sustainable Financial System with two other partners that reviews green finance developments in China and confirms the country has “firmly established itself as a global leader” [UNEP Press Release];
- Publications by the International Finance Corporation (IFC) on ‘Creating Markets for Climate Business,’ Climate Investment Opportunities in South Asia’ and ‘Green Finance Latin American Report 2017’ [IFC Paper on Markets for Climate Business] [IFC Paper on South Asia Climate Investment Opportunities] [IFC Paper on Green Finance in Latin America];
- Three publications from the GCF, namely a brief on ‘Simplified Approval Process,’ a brochure on the GCF Private Sector Facility and a factsheet on how GCF offers support for REDD+ [GCF Publications page];
- A briefing by the Stockholm Environment Institute (SEI) Adaptation Watch that asks ‘Can the Least Developed Countries Count on the Green Climate Fund?’ [SEI Brief];
- A mapping of climate risks to investments by Deutsche Bank [UNFCCC Press Release]; and
- A mapping by news website Carbon Brief on ‘Where Multilateral Climate Funds Spend Their Money’ [Carbon Brief Mapping].
For additional highlights of papers and reports on climate finance released last month, see the SDG Knowledge Weekly from 4 December.
* * *
The SDG Knowledge Hub publishes monthly climate finance updates, which largely focus on multilateral financing and cover, inter alia, mitigation and adaptation project financing news and lessons, institutional events and news, and latest developments in carbon markets and pricing. Past IISD climate finance updates can be found under the tags: Finance Update: Climate Change; and Finance Update: Sustainable Energy.