The Summary and Recommendations on the 2018 biennial assessment and overview of climate finance flows of the Standing Committee on Finance shows that on a comparable basis, global climate finance flows increased by 17% in 2015–2016 from 2013–2014 levels.
The Summary and Recommendations provide updated information on global climate finance flows for the period 2015-2016 and trends since 2011, their implications and relevance to international climate change efforts. They highlight the fact that the bulk of climate finance continues to go towards efforts to curb greenhouse gas emissions, and a relatively small proportion of finance goes towards efforts to enable the most vulnerable to adapt, noting measurement differences.
One central conclusion is that the growth in global climate finance seen in 2015 was largely driven by high levels of new private investment in renewable energy, the largest segment of the global total. The fall in renewable energy investment in 2016 was offset by an 8% increase in investment in energy efficiency. However, whilst climate-related finance flows are considerable, they remain relatively small in the context of wider trends in global investment.
For example, while global investment in renewable energy and renewable energy subsides are rising, global investment in fossil fuel and fossil fuel subsidies remain considerably higher. Another central finding is that climate finance to developing countries as reported in developed countries biennial reports to the UNFCCC increased by 24 per cent in 2015 to USD 33 billion and, subsequently, by 14 per cent in 2016 to USD 38 billion.
Other key findings relate to the efforts of Multilateral Development Banks that continue to scale up climate finance flows; flows through UNFCCC funds; and multilateral climate funds that are increasing – although their share of global climate finance flows remains small. Ownership is a critical factor in the delivery of effective climate finance. Significant data gaps on tracking climate finance flows at domestic level still prevail. Preliminary insights related to Article 2.1c of the Paris Agreement highlight the importance of considering climate finance flows in the broader context.
Further details can be viewed in the 2018 Summary and Recommendations here.
About the Standing Committee on Finance
The Standing Committee on Finance – the body that supports the Conference of the Parties with respect to climate finance matters – was established by Parties at COP17. SCF’s core mandates include work on improving coherence and coordination in the delivery of climate change financing, rationalization of the Financial Mechanism, mobilization of financial resources, and measurement, reporting and verification of support provided to developing country Parties – including through the preparation of the biennial assessment and overview of climate finance flows. Parties, at COP21, decided that the SCF shall server the Paris Agreement in line with its functions and responsibilities under the Conference of the Parties.
With the challenges and limitations in collecting, aggregating and analyzing data in mind, the SCF identifies:
- upward trends in climate finance flows from providers to beneficiary countries and considerable amounts of total global climate finance
- includes insights on the composition, purpose and emerging trends of a sub set of public climate finance flows to developing countries
- Takes stock of methods to measure, report and verify public and private climate finance flows and improvements
The 2018 BA is the first of the BAs to gather information relating to Article 2.1.c of the Paris Agreement. It considers climate finance in the context of broader finance flows, including their implications in the context of objective of the Convention and the goals in the Paris Agreement.
About the 2018 BA
The biennial assessment an overview of climate finance flows are collective efforts of the Standing Committee on Finance, with the active engagement and support by the whole Committee. It comprises a summary and recommendations and a technical report. The summary and recommendations are prepared by the Standing Committee on Finance.
The 2018 BA provides an overview of current climate finance flows over the years 2015 and 2016. It explores climate finance flows from developed to developing countries, available information on domestic climate finance and South–South cooperation, as well as the other climate-related flows that constitute global total climate finance flows. It then considers the implications of these flows and assesses their relevance to international efforts to address climate change.
The best information available from the most credible sources is utilized in compiling estimates, focused on primary finance – the finance for a new physical item or activity. Challenges remain in collecting, aggregating and analyzing information from diverse sources. This year, efforts have been made to improve representation of public and private investment in electric vehicles. However, information on sources and instruments for finance in public mass transit remains unreported in many countries.
High quality data on private investments in mitigation and finance in sectors such as agriculture, forests, water and waste management are particularly lacking. Adaptation finance estimates remain difficult to compare to mitigation due to being context-specific and incremental, and more work is needed on estimating investments that are climate-resilient.
Source: Press release United Nations Framework Convention on Climate Change, 23.11.2018