The UN Environment Programme reports that the last decade saw nine out of the 10 hottest years since reliable record keeping began, and a recent Berkeley study found that the Earth’s average land temperature had risen by .911 degrees Celsius since the 1950s, supporting several previous studies.
At this rate, the Earth will see greater melting of glaciers, inducing higher sea levels and low-lying countries like Bangladesh could see 17 percent of their territory go underwater with just one meter rise in sea levels. These reports are timely given the completion of the draft proposal for the Green Climate Fund born at last year’s United Nations Framework Convention on Climate Change meetings in Cancun, recalling attention to the urgency for collective action against the inevitable effects of climate change.
As Kaveh Zahidi, Climate Change Coordinator for the UN Environment Programme, explains to MediaGlobal, “Climate change can be seen as a threat multiplier. Countries are faced with simultaneous adverse impacts on their cities, their agriculture and farms, the built infrastructure and ecosystems upon which large parts of the population depend. The challenge is to adapt and respond to these simultaneous impacts…And all of this at the same time as maintaining and continuing the development gains made over the past decade.”
Climate change financing is a critical step in these efforts. For many developing countries, the costs in acquiring adaptive strategies and technologies are as daunting as the damages that may result in their absence. A 2010 World Bank report showed that the costs of adapting to a 2 degrees Celsius hike in global temperatures by 2050 could cost between $75 and $100 billion per year. The Green Climate Fund aims to raise an estimated $100 billion per year by 2020 to aid developing countries to fund the adoption of capacity-building measures and policies to combat the effects of climate change.
However, as Cassie Flynn, author of the recently published United Nations Development Program guidebook, Blending Climate Finance Through National Climate Funds, lays out to MediaGlobal, “It’s not just money that is necessary – it’s about how the money is used and how easily it can be put toward real actions on the ground. A key challenge for countries is ensuring that a National Climate Fund (NCF) is tailored to their specific climate and development goals and circumstances.”
Given the nuanced and evolving needs of countries tackling their unique challenges, financing for climate change will likely require a broad pool of sources. Flynn points to the growth in financial investments for climate change activities with over 50 international funds, 45 carbon markets and 6,000 private equity funds existing today that countries can tap.
With these resources, creating a NCF would strategically harness various sources of funding, public and private, domestic and international. These funds would be allocated as per a country’s respective needs while bringing together the many concerned parties to engage and advance these efforts. Additionally, with a larger mix of funds and resources, countries can hope to better execute their projects with ample financial support.
In bringing together these different actors and their resources, NCFs would be better suited to coordinate and provide nation-wide initiatives to address their climate change needs. Given their demand for a multi-pronged approach, both in obtaining funds but also in monitoring and evaluating their use, NCFs can strengthen existing institutional structures by promoting cooperation and accountability.
As economic uncertainty persists globally and we await the outcomes of the Durban Summit next month, it remains to be seen how funding sources will change and whether all costs can be covered. Professor Robert Stavins, Director of Harvard University’s Environmental Economics Program and the Harvard Project on Climate Agreements, tells MediaGlobal that, “Given the economic conditions in general and the government fiscal issues in particular that are currently affecting both Europe and the United States, expectations for funding cannot be high at present or for the next few years.”
Such forecasts emphasize the need to seek out diverse funding sources, and there are positive signs on this front. Flynn notes, “2010 was a record year for clean energy investment: $243 billion. However, only 10 percent of these funds went to countries outside of the G20. A key question for many countries is how they can better access the funds that are out there and how to leverage public funds to attract private investment. By helping countries to establish systems that can collect, blend, coordinate, and account for climate finance, NCFs can help countries to be one step closer to achieving this goal.”