EADI: EDC 2020 Working Paper on Climate Finance in Indonesia

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Working Paper: Climate Finance in Indonesia: Lessons for the Future of Public Finance for Climate Change Mitigation

International finance for climate change is high on the agenda of the international climate negotiations, and has become an important barometer for how rich countries with high historical emissions will help developing countries shift away from carbon-intensive development to lower carbon development pathways.

The Copenhagen Accord provides an indication of political consensus on the need to deliver finance to developing countries, and concretely states that developed countries should provide new and additional resources for developing countries approaching US$30 billion for the period 2010-2012 and that longer term funding should come from both public and private sources to mobilise US$100 billion per year by 2020 (UNFCCC, 2009). This has been further reaffirmed by the Cancun Agreement in December 2010, which provides more concrete details of financial pledges in 2020 and the global Green Climate Fund as a financial mechanism.

Around the world, stakeholders are increasingly grappling with questions around climate finance . These include questions such as: How should international financial flows for climate change be defined? What is the appropriateness of different mechanisms for delivering finance? How can foreign resources be appropriately coordinated and aligned with national institutions? And above all, how can financing to address climate change be delivered to countries and within countries in the most effective way?

By Jessica Brown and Leo Peskett

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