Total worldwide financing for managing climate change spiked by nearly 15 percent from 2011-2012 to 2013-2014, according to the latest biennial evaluation from the Standing Committee on Finance of the U.N. Framework Convention on Climate Change.
“In dollar terms estimated global total climate finance increased from a high bound estimate of USD 650 billion for 2011-2012 to USD 687 billion for 2013 and to 741 billion for 2014,” says the report, released Monday on the first day of the 22nd session of the Conference of Parties to the UNFCCC in Marrakesh, Morocco.
The largest portion of that financing comes from private investment in renewable energy and energy efficiency, the committee said. Information on renewable energy is more solid than data for energy efficiency, the report says, one of several points in which the committee acknowledged challenges in gathering and evaluating data from a wealth of sources. “The limited clarity with regard to the use of different definitions of climate finance limits comparability of data,” the panel noted.
Financing flows from developed nations to aid developing states address climate change reached $25.4 billion in 2013 and $26.6 billion the next year, with the vast majority in both years moving through bilateral, regional, and other channels. That is roughly 50 percent higher than the public financing reported through those channels in 2011-2012, the report says.
The figures demonstrate that developed nations are advancing toward their target of providing $100 billion annually for climate activities in developing nations in 2020, UNFCCC Executive Secretary Patricia Espinosa said in a prepared statement.
Still, a year after the adoption of the Paris Agreement on climate change, which entered into force Friday, “climate-related and SDG-related finance accounts for less than one per cent of the total of around $110 trillion devoted to global infrastructure and bond issuances, according to the New Climate Economy report,” Espinosa noted. “This means that there is enormous room for improvement, as well as enormous opportunities to be seized.”
Financial reports indicate that UNFCCC funds and mulilateral climate funds passed along $1.9 billion in 2013 and $2.5 billion in 2014.
Multilateral development banks delivered $20.8 billion in climate financing to developing nations in 2013 and $25.7 billion in 2014, with roughly half of that amount in each year originating in developed nations.
Private climate financing to developing countries appeared to be the most opaque among the various categories. Renewable energy finance from developed country companies is thought to be $1.8 billion in 2013 and $2.1 billion in 2014, while foreign direct investment in greenfield alternatives and renewable energy in developing states is tagged at $26.4 billion in 2013 and $21.6 billion in 2014. “Both estimates are likely to be conservative,” the report says.
Roughly 35 percent of bilateral, regional, and other financial assistance reported to the UNFCCC came in the form of grants, while 20 percent were concessional loans and 10 percent nonconcessional loans.
Over 70 percent of public financing in developing countries in 2013 and 2014 was directed toward climate mitigation activities, the committee found. Another 25 percent was adaptation finance. “This means that more sustainable and predictable funding for adaptation going forward is urgently needed, including through the Green Climate Fund and the Adaptation Fund,” Espinosa said.
The committee offered a number of recommendations, including encouraging climate finance providers to increase the availability of detailed, nation-specific data, and for the UNFCCC to strengthen the availability of that data; encouraging developing nations to use available resources “through the operating entities of the Financial Mechanism” to augment their capability to conduct their top climate activities and monitor and report climate finance; and encouraging member nations and key international entities to make more available data needed to monitoring the goals listed in Article 2 of the Paris Agreement on climate change.