Public institutions and support for climate funding

The authors emphasize that the world urgently requires trillions of dollars to invest in climate action and biodiversity protection to keep the global temperature rise below 1.5°C and to help countries to adapt to the worst consequences of climate change. They note, however, that despite some progress in securing financial resources for those purposes, the international community is falling well short of its formal pledges. Moreover, its commitments are far less than the total sum required to reduce global emissions and adapt to climate change. The shortfall in funding related to climate adaptation – for example, funding used to help developing countries to adjust to the effects of climate change, such as rising sea levels, extreme heat and droughts, and severe storms – is especially pronounced. The majority of public and private climate finance mobilized to date has been directed to mitigation efforts in developed countries, such as renewable energy, electric vehicles and other projects designed to reduce emissions. There are several institutional barriers that make it harder to mobilize the necessary climate mitigation and adaptation funds. These include: (a) a lack of direct access to climate funding at the subnational level; (b) a lack of human capacity to design well-structured, creditworthy projects; (c) the specific characteristics of adaptation projects, which make them less attractive to traditional financial investors; (d) the lack of widespread use of natural capital accounting to help to monetize values of ecosystem services; and (e) in some cases, deceptive accounting that has enabled some donors to reduce the actual funds committed below the amounts pledged. The authors recommend steps to overcome barriers hampering access to climate finance, particularly those related to adaptation funding, where the gap between the needs and funding available is most pronounced and acute. They list selected examples of best practices in climate financing. They urge the international community to fulfil pledges already made and to commit additional funds to mitigating and adapting to climate change.