Climate finance/finance institutions - J. Ellis (OECD) CCXG GF March 2014


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Climate finance/finance institutions - J. Ellis (OECD) CCXG GF March 2014

  1. 1. Climate Change Expert Group Jane Ellis, OECD Based on the draft paper “Replicating and Scaling Up Effective Climate Finance Interventions” by Takayoshi Kato, Jane Ellis, Pieter Pauw, Randy Caruso Institutional issues influencing climate finance replication and scaling up CCXG Global Forum 18 March 2014
  2. 2. 2 Climate Change Expert Group What is ‘institutional structure’?  Who is involved in the design, management, allocation, delivery of climate finance  Public, private, mixed  International, national, sub-national  The system in place governing interactions between these different actors  Both can affect success in replicating and scaling up climate finance interventions
  3. 3. 3 Climate Change Expert Group What are the trade-offs?
  4. 4. 4 Climate Change Expert Group CF aims influence institutional structure and replication  Some sources of climate finance (CF) have replication or scaling up as a specific aim  Often found with public CF sources (e.g. GEF, CTF)  Design aims for integration/alignment with government policies; learning and dissemination  Attracting private CF an important part of replicating and scaling up  To date, mobilised private finance focuses on mitigation activities  Threshold contributions, eligibility/scope for initial allocations influence what is subsequently replicated
  5. 5. 5 Climate Change Expert Group Decision-making structure  Wide variation in the number of steps, which actors are involved  This affects timeliness of disbursement – which in turn affects risks and returns … as well as replication  Also variation in how CF is delivered:  ex ante, e.g. grants, loans  ex post, e.g. results-based finance
  6. 6. 6 Climate Change Expert Group Decision-making structure: access Management board Implementing body Executing body Management board Implementing body Executing body International level National level Adapted from ODI and UNDP, 2011 Indirect accessDirect accessEnhanced direct access
  7. 7. 7 Climate Change Expert Group Scale of interventions  Institutional framework for replicating/scaling up will vary dependent on scale of interventions  Encouraging household-level actions requires local actors - or actors with established links to households (e.g. national electricity utility)  Buy-in (and other actions) by national government key to ensuring scaling up  Capacity building important for all actors  Links between actors important – so successful frameworks encourage regular communication
  8. 8. 8 Climate Change Expert Group Tackling multiple barriers  Successful interventions often tackle multiple barriers  Financial and information (e.g. IDCOL)  Policy framework, financial barriers (e.g. Ouarzazate)  Financial barriers, capacity building (GEF)  … and use multiple financial instruments to do so
  9. 9. 9 Climate Change Expert Group Insights  Institutional frameworks can help or hinder implementation of climate finance interventions…  Replication/scale-up helped by good information flow to a wide variety of actors  Hindered by long time-delays – particularly private finance  Trade-offs between safeguards and efficiency  Different types of multilateral access to CF exists – each has institutional implications
  10. 10. 10 Climate Change Expert Group Discussion questions  What are the institutional challenges that sources of climate finance face in replicating and scaling up climate finance to mitigation and adaptation?  How can international climate funds further contribute to encouraging mobilisation of climate finance from various sources (including private sector) through scale-up and replication processes?