Challenges and Oportunities of
International Climate Finance
Seminario BID – BNDS-ALIDE-ABDE
Rio, 27 August, 2013
María Pa...
DEFINITION AND SCOPE:
What is Climate Finance and how
much do we need?
FINAL REMARKS
HISTORY AND UPDATE:
What originated i...
DEFINITION AND SCOPE:
What is Climate Finance and how
much do we need?
FINAL REMARKS
HISTORY AND UPDATE:
What originated i...
DEFINITION AND SCOPE:
What is Climate Finance and how much
do we need?
FINAL REMARKS
HISTORY AND UPDATE:
What originated i...
What is the outlook for Paris 2015?
• Cancun: GCF is created
• Agreement under DP: new and universal GHG reduction instrum...
What is the outlook for Paris 2015?
• Review: Governments launched a robust process to review
the long-term temperature go...
DEFINITION AND SCOPE:
What is Climate Finance and how much
do we need?
FINAL REMARKS
HISTORY AND UPDATE:
What originated i...
Climate Finance: General Outlook
(1)
• USD 364 mil millones en 2010/2011.
– Aumentó pero aún lejos de la inversión requeri...
Source: Climate Funds Update
Sources and mitigation end uses
Country source End use (mitigation)
Usos: Economías emergente...
DEFINITION AND SCOPE:
What is Climate Finance and how much
do we need?
FINAL REMARKS
HISTORY AND UPDATE:
What originated i...
Challenges (1)
At an international level:
• An insufficient amount, target, speed: Is 100 billion enough?
– Lack of climate finance mobil...
At a national level:
• BAU is the current option:
– Growth without constraints, perception that environment is an addition...
DEFINITION AND SCOPE:
What is Climate Finance and how much
do we need?
FINAL REMARKS
HISTORY AND UPDATE:
What originated i...
• Influencing from a practical perspective:
– Play an active role: Influence the international climate finance
architectur...
• Build the case
– Cases that work: what would be needed to scale it to meet a
national target
– COP20 (2014) in Lima: bri...
Thank you!
www.libelula.com.pe
“Oportunidades y Retos del Financiamiento Climático Internacional ” - Maria Paz Cigarán
“Oportunidades y Retos del Financiamiento Climático Internacional ” - Maria Paz Cigarán
“Oportunidades y Retos del Financiamiento Climático Internacional ” - Maria Paz Cigarán
“Oportunidades y Retos del Financiamiento Climático Internacional ” - Maria Paz Cigarán
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“Oportunidades y Retos del Financiamiento Climático Internacional ” - Maria Paz Cigarán

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Seminario BID-BNDES-ALIDE-ABDE

“La Promoción del Financiamiento Verde en América Latina y el Caribe: intercambio
de experiencias y buenas prácticas en las instituciones financieras de desarrollo”

Fecha: Martes 27 de Agosto de 2013
Lugar: Auditorio del BNDES, Av. República do Chile, 330, Octavo Piso, Rio de Janeiro, Brasil

Published in: Economy & Finance, Technology
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  • 4. The five largest contributors of climate finance are the United States, Japan, the United Kingdom, Germany and – more surprisingly (given its relative size) – Norway. Together, these countries have pledged $8.9 billion in climate finance to multilateral climate funds and initiatives between 2003 and 2012. The US has pledged the most finance, as one might expect from this large economy with high emissions. It has not yet followed through by depositing all of the finance it has pledged, however. Norway punches above its weight: it features in this top five contributor list, even though the absolute size of its economy is relatively small, and its citizens live lifestyles that produce relatively low emissions.Finance to stop or reverse climate change has, for the most part, supported energy efficiency and renewable energy programmes.A closer look at the portfolios of the two largest funds to combat climate change, the World Bank administered Clean Technology Fund (CTF) and the Global Environment Facility (GEF), finds that energy efficiency projects have received the most finance. Energy efficiency can be difficult to implement, but it is often cost effective in the longer term and support low-carbon development.. These two funds have also financed low carbon transport solutions such as bus rapid transit and rail systems. Finally, substantial finance has been invested in renewable solutions to energy needs, particularly solar and wind power. The volume of climate finance for hydropower (a widely deployed and commercial technology that can pose significant environmental and social risks) increased significantly this year. This results from a CTF financed development policy loan to the Indian state of Himachal Pradesh to develop its hydropower resources. Source: Climate Funds Updatehttp://www.climatefundsupdate.org/global-trends/10-things-to-know-about-climate-finance-in-2012
  • “Oportunidades y Retos del Financiamiento Climático Internacional ” - Maria Paz Cigarán

    1. 1. Challenges and Oportunities of International Climate Finance Seminario BID – BNDS-ALIDE-ABDE Rio, 27 August, 2013 María Paz Cigarán
    2. 2. DEFINITION AND SCOPE: What is Climate Finance and how much do we need? FINAL REMARKS HISTORY AND UPDATE: What originated it and where are we? 1 FLOWS AND TRENDS: Where do resources come from and go to? BARRIERS AND OPORTUNITIES: What challenges need to be overcome from an int. & nat. perspective? What are we addressing on this PPT? 2 3 4 5
    3. 3. DEFINITION AND SCOPE: What is Climate Finance and how much do we need? FINAL REMARKS HISTORY AND UPDATE: What originated it and where are we? 1 FLOWS AND TRENDS Where do resources come from and go to? BARRIERS AND OPORTUNITIES: What challenges need to be overcome from an int. & nat. perspective? What are we addressing on this PPT? 2 3 4 5
    4. 4. DEFINITION AND SCOPE: What is Climate Finance and how much do we need? FINAL REMARKS HISTORY AND UPDATE: What originated it and where are we? 1 FLOWS AND TRENDS: Where do resources come from and go to BARRIERS AND OPORTUNITIES: What challenges have to be overcome from an int. & nat. perspective? What are we addressing on this PPT? 2 3 4 5
    5. 5. What is the outlook for Paris 2015? • Cancun: GCF is created • Agreement under DP: new and universal GHG reduction instrument with legal force by 2015 for the period beyond 2020. Further raise the existing level of action and stated ambition. • Doha: The finance in the period between 2013 and 2015 should equal or exceed the average annual level with which countries provided funds during the 2010 to 2012 fast-start finance period (a total of USD 30 billion.) This is to ensure there is no gap in continued finance support while efforts are otherwise scaled up. – Governments will continue a work programme on long-term finance during 2013 to identify pathways for mobilizing scaled-up finance to reach the 100 billion target by 2020. A high-level roundtable on finance is planned for COP19/ CMP9 in Warsaw so that ministers can provide general guidance. • “Bottom up approach” – need to start consolidating and scaling best practice
    6. 6. What is the outlook for Paris 2015? • Review: Governments launched a robust process to review the long-term temperature goal, which is to start in 2013 and conclude by 2015, aimed at providing a reality check on the advance of the climate change threat and the possible need to mobilize further action. • Pathway for institutional arrangements for Adaptation • Programme on market mechanisms • Clarify ways to measure deforestation • Registry and Programme to build climate action capacity • Economic diversification activity (took note)
    7. 7. DEFINITION AND SCOPE: What is Climate Finance and how much do we need? FINAL REMARKS HISTORY AND UPDATE: What originated it and where are we? 1 FLOWS AND TRENDS: Where do resources come from and go to? BARRIRES AND OPORTUNITIES: What challenges have to be overcome from an int. & nat. perspective? What are we addressing on this PPT? 2 3 4 5
    8. 8. Climate Finance: General Outlook (1) • USD 364 mil millones en 2010/2011. – Aumentó pero aún lejos de la inversión requerida para 2°C (AIE: inversión gradual en energía 36 USD billones en 2012-2050 - o USD 1 billón por año). • Fuentes: – Sector privado (USD 217-243 miles de millones) de países desarrollados. – Sector público (USD 16-23 miles de millones) como catalizador para privado y como ayuda al desarrollo (de 9.5 miles de millones a 23) • Intermediarios, en especial los bancos nacionales de desarrollo y comerciales cumplen papel importante en levantamiento y canalización de fondos (USD 110-120 miles de millones), y en la creación de un entorno propicio para la inversión del sector privado. • Instrumentos: USD 293-347 MM instituciones financieras con interés de propiedad (el dinero que tiene que ser devuelto). – Intermediarios públicos habilitan proyectos que serían inviables a través préstamos concesionales y donaciones.
    9. 9. Source: Climate Funds Update Sources and mitigation end uses Country source End use (mitigation) Usos: Economías emergentes destinatarios principales, y fuentes importantes (un tercio de inversiones de mitigación a China, Brasil e India).
    10. 10. DEFINITION AND SCOPE: What is Climate Finance and how much do we need? FINAL REMARKS HISTORY AND UPDATE: What originated it and where are we? 1 FLOWS AND TRENDS: Where do resources come from and go to? BARRIERS AND OPORTUNITIES: What challenges have to be overcome from an int. & nat. perspective? What are we addressing on this PPT? 2 3 4 5
    11. 11. Challenges (1)
    12. 12. At an international level: • An insufficient amount, target, speed: Is 100 billion enough? – Lack of climate finance mobilization: developed and developing – Lack of notion of pathways/roadmap • Lack of coherence and coordination among different institutions and bodies under the convention – Various source institutions / international burocracy /different rules and procedures • Mechanisms/decisions do not match specific country needs – Adaptation vs. mitigation: what if 2015 agreement not ambitious? – Local needs not necessarily match global (try to standardize, not a flexible approach) – Innovation promotion? Who takes the risk? • Unpredictable carbon pricing • Lack of trust & transparency  Private sector window in GCF and readiness approach Challenges and oportunities (2)
    13. 13. At a national level: • BAU is the current option: – Growth without constraints, perception that environment is an additional burden – lack of clear signals to promote LCD • How much do we need? What do we prioritize? What instruments should be promoted • Institutional coordination and capacities to be strengthen • Up front cost and risks  NDB: – knowledge on national investment conditions – Bridge: government/private sector – Fiduciary standards Challenges and opportunities (3)
    14. 14. DEFINITION AND SCOPE: What is Climate Finance and how much do we need? FINAL REMARKS HISTORY AND UPDATE: What originated it and where are we? 1 FLOWS AND TRENDS: Where do resources come from and go to? BARRIERS AND OPORTUNITIES: What challenges have to be overcome from an int. & nat. perspective? What are we addressing on this PPT? 2 3 4 5
    15. 15. • Influencing from a practical perspective: – Play an active role: Influence the international climate finance architecture – Use this as an excuse for your further strengthening: new strategic vision and role for development (under a new risk/opportunity) – Work with national institutions and stakeholders to create the enabling environment A window of oportunities (1)
    16. 16. • Build the case – Cases that work: what would be needed to scale it to meet a national target – COP20 (2014) in Lima: bring practical ideas to the table • Innovate for adaptation: – Gap for credit approval – the most vulnerable – Catalyse resilient investment • Create evidence based systems • Direct access
    17. 17. Thank you! www.libelula.com.pe

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