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1. Climate Finance Effectiveness: Six Challenging Trends

Author:
Beata Cichocka and Ian Mitchell
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
This paper identifies and explores a number of challenges in using international public climate finance effectively towards contributing to low-carbon and resilient growth in lower- and middle-income countries. We explore key quantitative and qualitative trends in the climate finance architecture, including predictability of disbursements, affordability and concessionality of funding, provider proliferation and project fragmentation, implementation via modalities supporting recipient ownership, and the degree to which climate-related interventions are evaluated. Our research considers these trends against globally agreed principles of development effectiveness, with the aim of improving understandings of both the common and the climate-specific challenges within development finance. Ultimately, we find that climate-related development finance faces a number of challenges relative to other official development flows, including significantly lower disbursement ratios, a higher share of finance provided through debt instruments—and a rising share of loans to lower-income countries assessed as being at high risk of debt distress, a faster pace in proliferation of providers and shrinking project sizes, and fewer efforts to systematically evaluate impacts of interventions. Each of these areas will need to be tackled by public climate finance providers to ensure that the available funding is used towards climate objectives effectively. These and other issues related to the quality of climate finance should also be considered during the design of the new quantitative climate finance target under the UNFCCC to ensure that the structure of the goal promotes accountability and increases recipients’ ability to trust in the climate finance architecture.
Topic:
Climate Change, Environment, International Cooperation, and Resilience
Political Geography:
Global Focus

2. Valuing Climate Liabilities: Calculating the Cost of Countries’ Historical Damage from Carbon Emissions to Inform Future Climate Finance Commitments

Author:
Lee Robinson and Ian Mitchell
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
A central commitment of action on climate is the promise of “developed countries” to jointly mobilize $100 billion of climate finance per year by 2020 (and through to 2025), formalised at the UN climate change conference in 2010 (COP16). Five years later, the Paris Agreement reaffirmed this commitment and promised a new goal after 2025 “from a floor of USD 100 billion per year.” We propose an approach for calculating financial climate liabilities for each country based on their historical CO2 emissions, using the idea of an externality: a social cost that has not been borne by the agent whose actions produced it. The paper follows earlier work on calculating carbon debts (e.g., Kunnas, 2014) which we update with recent and authoritative research on carbon pricing methods. We also adjust for awareness, calculating the accruing of liabilities only from the time that countries knew that their emissions were harmful. We present several scenarios adjusting this and other assumptions. The main scenario produces a clearly quantified liability for each country and a total carbon liability to the world of $34 trillion, or $4,500 per capita. If this liability was used to set climate finance goals, it would suggest OECD countries would need to contribute $190 billion a year to 2100. The analysis also highlights that other industrialised countries, notably China and Russia, have also built-up substantial liabilities and should therefore also contribute to future climate finance goals.
Topic:
Climate Change, Energy Policy, Environment, Carbon Emissions, and Green Transition
Political Geography:
Global Focus

3. The Commitment to Development Index 2021

Author:
Ian Mitchell, Lee Robinson, Beata Cichocka, and Euan Ritchie
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The Commitment to Development Index (CDI) ranks 40 of the world’s most powerful countries on policies that affect more than five billion people living in poorer nations. Because development is about more than foreign aid, the CDI covers eight distinct policy areas: Development Finance Investment Migration Trade Health Environment Security Technology
Topic:
Security, Development, Environment, Health, Migration, Science and Technology, Finance, Investment, and Trade
Political Geography:
Global Focus