5.1.2

Governance of Climate Finance

To support mitigation and adaptation a significant scaling-up of today’s levels of support for climate action is needed. In order to understand how climate finance can be sustained at the international level, we examine from a legal perspective what is needed to improve the international governance for climate finance and how new sources, including trade-related sources of finance, can be mobilised.

Delivering mitigation at the scale expected to avoid “runaway climate change” requires a significant scaling-up of today’s levels of support for climate action.

 

To scale up financing for climate change action, developed countries have pledged within the framework of the UNFCCC to deliver $100 billion a year by 2020 to support both mitigation and adaptation in developing countries. They have further set up a new financial entity, the Green Climate Fund (GCF) as well as a Standing Committee to assist countries in the mobilisation of financial resources.

 

With these new institutions, climate finance governance has been enhanced significantly.  It is yet unclear what financial resources will be channelled by the GCF, how new and additional sources can be mobilised for climate finance and what will be the role of the private sector in their delivery.

 

These three imperatives, the creation of adequate international governance for climate finance, the creation of new sources for finance and the necessity to look beyond development aid towards private investment and trade are the principal underpinnings of this project.

 

Our analysis will examine in particular if and how the GCF is likely to tackle the current failures of Official Development Aid (ODA) governance, which suffers from duplications, inefficiencies and a general loss of transparency. The aim is further to explore how new trade-related sources of finances as well as global and regional taxation systems akin to a Tobin tax, or the European Union financial transaction tax, can be harnessed for climate finance.

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