1. Challenges to climate finance
Dr. Hanne Knaepen
6 July 2016

2. Outline 1 2 3 4 The global climate finance architecture
A closer look at the Green Climate Fund (GCF) 3
Key challenges for effectiveness 4
The way forward
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3. 1. The global climate finance architecture
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4. 1. The global climate finance architecture
Climate finance sources
Public sources
Development bank-type instruments
Carbon markets
Private capital
Source: OECD, 2014.
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5. 1. The global climate finance architecture (cont.)
1991, Global Environment Facility (GEF)
2009, Adaptation Fund (AF)
2011, Green Climate Fund (GCF)
Multilateral
Germany, International Climate Initiative
UK, International Climate Fund
Norway, International Forest Climate Initiative
Bilateral
Regional: African Risk Capacity (ARC), Caribbean Catastrophic Risk Insurance Facility
National: Benin National Fund on Climate Change, Mali Climate Fund
Regional and national
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6. 1. The global climate finance architecture (cont.)
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Source:

7. 1. The global climate finance architecture (cont.)
COP21: first COP with one full day on agriculture
Increasing climate financing for agriculture
2012: Adaptation for Smallholder Agriculture Programme (ASAP), IFAD
Largest global financing source dedicated to support adaptation for smallholders so they can access information tools and technologies that help build resilience.
Special objective: enable smallholders to benefit from climate finance.
This COP21 is the first COP ever that dedicated a full day (last Tuesday) on 'agriculture', organised by the Lima-Paris Action Agenda (LPAA). Quite striking that is has taken so long. 
Reasons for the increased attention: the undeniable climate - agriculture - food security link (as described in BN80), thanks to very convincing scientific evidence (IPCC reports/ World Food Programme's work on food insecurity & CC), very good lobby work (e.g. CSA alliances, AGRA, CGIAR, NGOs such as Oxfam, etc), the criticism on climate finance having been dedicated in such great amounts to mitigation and less to adaptation activities (currently only 16%) that are more strongly required for smallholder farmers in Africa, and the prominence of 'agriculture' in the INDCs. 
IFAD funding 2014: 353 million USD, thanks to 8 development partners (also Belgium).
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8. 2. A closer look at the Green Climate Fund (GCF)
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9. 2. A closer look at the GCF Key features?
2010 (Cancun COP): developed countries’ commitment to mobilise 100 billion USD annually by 2020 for climate action in developing countries (Initial pledging goal of 10 billion USD: reached);
Main channel to solve complexity of climate finance;
Board: 50/50 representatives from developed and developing countries;
Balanced finance between adaptation and mitigation (50/50);
Key role private sector;
Risk-management framework;
Recipients submit proposals through Nationally Designated Authorities;
Wide accreditation potential.
GCF is ran independently from the UN (despite UNFCCC born)
Balanced finance: adaptation + mitigation (with special focus on the small-island developing states (SIDS), the least-developed countries (LDCs) and African states.
PRIVATE SECTOR: Private Sector Facility.
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10. 3. Key challenges for effectiveness
Issues that may fuel the debate today.
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11. 3. Key challenges for effectiveness
No internationally agreed definition of climate finance + lack of transparency;
Most climate funding to emerging countries, not to the poorest;
Funds are inflexible and risk averse;
Structure of climate financing is fragmented + bureaucratic;
Funds lack inclusivity;
How to implement?
1-What is FAIR? What is new and additional? This makes monitoring difficult + creates lack of transparency
3-(makes it difficult to finance climate funds in the agri sector)
5 Funds often do not support the wider range of government, business and socio-economic actors within countries + Lack of innovative relationship between climate funds and financial institutions that are most active in climate relevant sectors, notably infrastructure.
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12. 3. Key challenges for effectiveness (cont.)
Three key challenges for GCF
Benefits and rights of the poorest are not addressed directly and clearly in the Results Framework.
50/50 split, but will the Nationally Designated Authorities (NDAs) prioritise adaptation? And, how to encourage the private sector to invest in adaptation?
Will subnational institutions and stakeholders (farmers!) have free and fair access to funding and to decision-making of the NDAs?
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13. 4. The way forward
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14. 4. The way forward How to trigger trillions, not billions?
How to implement the NDCs in an innovative way?
How to ensure inclusivity?
How to ensure transparency?
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15. 4. The way forward 3 guiding questions for discussion: ECDPM
how to fully ensure access for socio-economic actors, and more precisely smallholder farmers?
how to leverage more climate funds, and more precisely from national African sources? What is the potential?
how to implement the NDCs, and more precisely, how to make sure that the many scientific solutions and international alliances and funds play out on the ground with extremely complex institutional, economic and political dynamics (such as in African countries)?
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16. Thank you very much.