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FEATURE: Tracking climate finance

11. Tracking Climate Finance: What and how?

Authors: Christa Clapp, Jane Ellis, Julia Benn, Jan Corfee-Morlot; OECD/IEA working paper

Date: May 2012

CFAS summary:

The paper analysis two issues 1) how the international community counts both public and private financial flows towards the $100 bn commitment, and 2) how to track these flows. To collect robust, consistent and comparable data from countries and entities the paper provides definitions or guidelines on terms such as additionality and mobilisation. On additionality: following the UNFCCC negotiations in Durban 2011 there is no detailed guidance as to what types of financial flows might be counted, nor on how to count them; and on mobilising: they explain what is meantby climate finance being “mobilised”, and how it can be demonstrated. This is provided as context for enabling the development of a Monitoring, Reporting and Verification framework for tracking climate finance flows. The paper focuses on which financial flows might count towards the $100 bn by identifying more political questions and suggest technical elements which can improve the tracking system. Table 2 in the paper provides a good overview of available data and systems. The paper elaborates important questions and implications for multiple sources, instruments, intermediaries and recipients involved in providing or receiving climate finance summarized in Table 3 – 12. Table 13 summarises the challenges for developing a robust tracking system.

Why we recommend this:

The paper provides several steps to move forward on developing a robust climate finance tracking system, such as: 1) encourage internationally-harmonised reporting of multilateral climate finance, e.g. by MDBs, in a manner consistent with the OECD DAC  reporting and establish a dialogue to move forward on the top-down political questions and definitions; 2) work towards an internationally-agreed methodology for calculating public finance leverage ratios for finance mobilised by public policy, measures or investment; 3) start with targeted bottom-up decisions on flows that might count towards the $100 bn.

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