Climate Finance in 2013-14 and the USD 100 billion goal

Climate Finance in 2013-14 and the USD 100 billion goal A report by the OECD in collaboration with Climate Policy Initiative Summary

Improving transparency on climate finance and the USD 100 billion goal •

Climate Finance in 2013-14 and the USD 100 billion goal, launched on 7 October in collaboration with Climate Policy Initiative, provides an up-todate estimate of public and private climate finance in relation to the UNFCCC commitment by developed countries in 2010 to mobilise USD 100 billion per year by 2020 to address the needs of developing countries.

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The project was initiated at the request of the current and outgoing presidencies of the UNFCCC Conference of Parties (COP), France and Peru, in the context of enhancing transparency on climate finance ahead of COP21 in Paris.

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Building on efforts by the UNFCCC Standing Committee on Finance and the international community, this report aims to be rigorous in its assessment of the available data and is transparent about the underlying assumptions and methodologies.

There have been significant improvements in the tracking of climate finance Efforts are underway across the international community to improve definitions, methodologies as well as the quality, consistency and coverage of available data on climate finance. The report builds on these efforts and the significant engagement of countries and development finance institutions, in order to present: •

Comprehensive (though preliminary) figures for public climate finance in 2013 and 2014.

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Partial estimates of mobilised private climate finance.

The accounting framework (illustrative, not to scale) Official development assistance (ODA)

Other official flows (OOF)

Export credits Mobilised private finance

Concessional

Non-concessional

The report transparently describes the accounting framework, methodologies, working classifications and definitions drawn on to provide estimates of climate finance. These assumptions were made without prejudice to any decisions under the UNFCCC. The data and underlying methodologies build on efforts by the international community over a number of years to improve the tracking of climate finance, in particular by developed Parties to the UNFCCC, a group of Multilateral Development Banks (MDBs) and members of the International Development Finance Club (IDFC) as well as by the OECD (the Development Assistance Committee (DAC) and the OECD-hosted Research Collaborative), CPI and other institutes.

Despite improvements to methodological approaches and data collection efforts that support estimates such as this one, there remains significant work to be done to arrive at improved estimates in the future.

Climate finance reaches USD 62 billion in 2014 Public and private finance mobilised by developed countries for climate action in developing countries reached an estimated USD 62 billion in 2014, up from USD 52 billion in 2013. That represents an average of USD 57 billion annually over the 2013-14 period.

This aggregate volume does not include finance related to coal projects. However, Japan and Australia consider that financing for high efficiency coal plants should also be considered as a form of climate finance and, in addition to the figures in this report, Japan has provided USD 3.2 billion for such projects in 2013-14.

Breakdown of climate finance in 2013, 2014 & the average over 2013-14 (USD billions) Bilateral public finance

Multilateral public finance (attributed)

Export credits

Private co-finance mobilised (attributed)

Total: 61.8 bn Total: 57.0 bn Total: 52.2 bn 12.8 bn

16.7 bn 14.7 bn 1.6 bn

1.6 bn

1.6 bn

15.4 bn

20.4 bn

17.9 bn

22.5 bn

23.1 bn

22.8 bn

2013

2014

Avg. 2013-14

The estimates presented in the report are preliminary and, in some instances partial The vast majority of climate finance was public in origin – some 71% – through either bilateral or multilateral channels. The figures are based on a dedicated survey of what developed countries expect to report to the UNFCCC in January 2016, and finance reported by key multilateral climate change funds and Multilateral Development Banks that can be attributed to developed economies.

Mobilised private climate finance currently represents an estimated 26%.

The figures are based on private co-financing directly associated with public finance interventions. As such, they do not capture the indirect mobilisation effect of capacity building, policy-related interventions and the role played by broader enabling environments. The estimate should also be considered as partial in so far as current data availability across institutions and instruments varies. These limitations reflect that the measurement and reporting of mobilised private finance is in its infancy and remains work in progress, with varying degrees of data coverage currently available across institutions and financial instruments.

Most climate finance is allocated towards climate change mitigation objectives Of the aggregate estimate, 77% of climate finance is allocated towards climate change mitigation objectives, 16% towards climate change adaptation and 7% to activities that target both. The imbalance between mitigation and adaptation finance is estimated to be greater for private finance (90% versus 10%) than public finance.

Mobilised climate finance in 2013-14, thematic allocation Adaptation

Mitigation 7%

77 % 4%

14 %

16 % 2%

20 %

29 %

18 % 68 %

69 %

76 %

MDBs (attributed)

Bilateral

Climate Funds

10 %

100 %

90 %

Export credits Mitigation

Private Adaptation

Cross-cutting

Why the OECD and CPI? The OECD has extensive experience and expertise in tracking and analysing international climate finance, both through the OECD Development Assistance Committee (DAC) statistical framework and data on climate-related development finance, and the work of the OECD-hosted Research Collaborative on Tracking Private Climate Finance.

Climate Policy Initiative brings substantial knowledge on the overall landscape on climate finance, and since 2011 has worked at the forefront of efforts to systematically track global climate finance, and to address related methodological and definitional issues.

The OECD and CPI remain committed to working with the international community to help improve the understanding and transparency of climate finance.

More information Access the report here: www.oecd.org/environment/cc/oecd-cpi-climate-finance-report.htm

Contact us Simon.Buckle@oecd.org (Head of the Climate, Biodiversity and Water Division) Stephanie.Ockenden@oecd.org (Lead analyst and Project manager) Raphael.Jachnik@oecd.org (Policy analyst, private climate finance) Barbara.Buchner@CPIVenice.org Senior Director of Climate Finance, CPI

OECD work on climate www.oecd.org/environment/cc/

OECD at #COP21 www.oecd.org/environment/cc/cop21.htm

CPI www.climatepolicyinitiative.org