Ambitious mitigation actions are critical to avoid dangerous climate change. Mitigation finance represents more than half of the public climate finance flowing through dedicated climate funds monitored by Climate Funds Update.
Between 2004 and 2014, mitigation finance from climate funds approved US$6.63 billion. The top five recipient countries (Morocco, India, Mexico, South Africa and Indonesia) will receive almost half of this. The direction of mitigation finance has been towards high-emitting and growing middle income economies in Asia Pacific, Latin America and Europe and Central Asia. In 2014, solar, energy efficiency and geothermal sector activities received the largest volume of mitigation funding with largest sources being the World Bank administered Clean Technology Fund (CTF) and the Global Environment Facility (GEF).
Mitigation activities are needed in all countries at all scales, however, and climate funds have worked to finance both large scale mitigation opportunities in fewer countries as well as smaller scale solutions. The GEF and the Scaling Renewable Energy Program (SREP) under the Climate Investment Funds are improving energy access for the poor by supporting rural electrification using renewable energy technologies, for example.
Private finance for mitigation is a much larger pot than for the money which flows through the climate funds. While difficulties exist in defining and getting data on this spend, the scale is substantial. In 2013, for example, private actors invested USD 193 billion in renewable energies. The Clean Development Mechanism (CDM) is a form of mitigation funding that has arisen under the UNFCCC. It allows a country with an emission reduction commitment under the Kyoto Protocol to implement an emission-reduction project in developing countries that earn certified emission reduction (CER) credits, each equivalent to one tonne of CO2, which can be counted towards meeting Kyoto targets. The carbon prices drops in recent years have made this source of funding less significant than expected.
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- Policy update: nationally appropriate mitigation actions (NAMAs) and carbon markets
- F. Röser; C. De Vit; M. Jung / Ecofys 2012
- Nationally Appropriate Mitigation Actions (NAMAs) and carbon markets are currently developing in parallel with increasing debate on how to link the two approaches. This paper explores the role carbon markets may play for NAMAs and the...
- Financing climate change mitigation: towards a framework for measurement, reporting and verification
- J. Corfee-Morlot; B. Guay; K. M. Larsen / Organisation for Economic Co-operation and Development 2009
- This paper focuses on North-South finance flows to explore how sources of mitigation support vary in terms of their relative size and importance to mitigation efforts, type and purpose. It states that financial support for greenhouse ...
- Catalyzing low carbon development? The clean technology fund
- S. Nakhooda / World Resources Institute, Washington DC 2009
- This working paper analyses the first set of clean technology investment plans from Egypt, Mexico and Turkey and makes the case for greater emphasis on institutional capacity and governance in measuring programme results. It notes tha...
- What role for public finance international in climate change mitigation
- R. Doornbosch; E. Knight / Organisation for Economic Co-operation and Development 2008
- This paper considers how public finance in developed countries can best be used to support climate change mitigation in developing countries. It describes the role of public finance in climate change mitigation in relation to other in...
- The effectiveness of climate finance: a review of the Global Environment Facility
- S. Nakhooda / Overseas Development Institute 2013
- Overseas Development Institute study reviewing the operations of the Global Environment Facility. Having been established in 1994, the Global Environment Facility (GEF) is the longest running multilateral climate change fund. A...
- The Emissions Gap Report 2013
- United Nations [UN] Environment Programme 2013
- Comprehensive 2013 United Nations Environment Programme (UNEP) report examining the risk and extent of a future greenhouse gas 'emissions gap'. This synthesis report concerns the global attempt to reduce greenhouse gas emission...
- The Global Landscape of Climate Finance 2014
- B. Buchner; M. Stadelmann; J. Wilkinson / Climate Policy Initiative 2014
- In December 2015, countries will gather in Paris to finalize a new global agreement to tackle climate change. Decisions about how to unlock finance in support of developing countries’ low-carbon and climate-resilient devel...