It is pertinent that deposits made to climate funds actually lead to the uptake and utilisation of these, especially in climate vulnerable countries. Disbursement rates of climate funds are less than a third of the deposits, and sub-Saharan Africa is especially underrepresented in this, receiving less than 10 per cent of these funds over the years. While newer funding mechanisms which are more liberal towards LMICs countries are welcome, the funds must also be flexible so that there is lesser backlog in translating these into viable projects. Central banks and domestic regulators could play an important role in creating and maintaining a transparent database of bankable projects that are accessible to public and private-sector investors to best leverage the existing funds in place.
The UN Sustainable Development Solutions Network can support these domestic institutions and play a vital role in strengthening the technical capacities of local governments, national governments, and central banks in implementing the strategies as agreed in the Paris Agreement in 2015. As the knowledge body and technical expert on SDGs, it is well placed to build the capacities of cities and local governments in being able to attract and mobilise resources for climate action. As the IMF has urged, strong local capacity must translate to channelling funds more swiftly and efficiently into countries whose needs are the highest.
As highlighted in the recently concluded LSE’s Environment Week, towards ensuring climate justice for all, further research is needed on where to best allocate funding towards climate adaptation. On both the blended finance model as well as innovative pension fund approaches, more research on their practical applications, in-country experiences and potential challenges is needed.
COP28 in UAE seeks to deliver a new deal on finance that is affordable, available, and accessible as a commitment towards climate action for the future. One hopes that conference leads to a consensus on ensuring innovative, practical, just and long-lasting climate finance solutions, and ensuring a fairer climate future for all.
Photo credit: John Englart used with permission CC BY-SA 2.0 DEED
