Climate Finance Provided and Mobilised by Developed Countries in 2016-2020

Abstract

At the 15th Conference of Parties (COP15) of the UNFCCC in Copenhagen in 2009, developed countries committed to a collective goal of mobilising USD 100 billion per year by 2020 for climate action in developing countries, in the context of meaningful mitigation actions and transparency on implementation (UNFCCC, 2009[1]). The goal was formalised in the Cancun Agreements adopted at COP16 (UNFCCC, 2010[2]). At COP21 in Paris, the annual USD 100 billion goal was extended to 2025 (UNFCCC, 2015[3]).Since 2015, at the request of donor countries, the OECD has produced analyses of progress towards this goal1. These analyses are based on best-available data and a robust accounting framework, consistent with the outcome of COP24 agreed to by all Parties to the Paris Agreement as regards the funding sources and financial instruments related to reporting of information on financial resources provided and mobilised through public interventions (UNFCCC, 2019[4]).OECD figures capture four distinct components of climate finance provided and mobilised by developed countries: (i) Bilateral public climate finance provided by developed countries' bilateral agencies and development banks; (ii) Multilateral public climate finance provided by multilateral development banks and multilateral climate funds, attributed to developed countries; (iii) Climate-related officially supported export credits, provided by developed countries' official export credit agencies, and (iv) Private finance mobilised by bilateral and multilateral public climate finance, attributed to developed countries.

Socio-political cost of accelerating coal phase-out

“…However, this would require using most of the pledged international climate financing to fund compensation for coal phase-out in China and India (Figure 3). Additionally, so far, only about half of annually pledged transfers under the Paris Climate Agreement have been mobilized 41 . Additionally, the funding for Just Energy Transition Partnerships in Indonesia and Vietnam is comparable to the Official Development Assistance (ODA) for these countries and in the past, a proportion of ODA has been earmarked for climate change mitigation 42 (Figure 3).…”

“…Source: OECD 42 . -Climate finance pledged by developed countries to developing countries at COP15 41 .…”

Financing solutions to foster industrial decarbonisation in emerging and developing economies

“…Transition affects various industry issues and may disrupt the broader economy and industrial development policies. In a recent report for the 2023 Japanese G7 Presidency, the OECD highlighted how differences in assets, inputs used, the business environment and innovation efforts make for heterogeneous decarbonisation pathways in the global steel sector (OECD, 2023 [37]). These differences underline that effective industrial decarbonisation requires an inclusive approach.…”

“…The partial credit guarantees are provided to cover a share of default risk faced by PFIs in extending loans to eligible energy efficiency projects implemented through ESCOs after entering energy savings performance contracts. To date, PRSF has provided partial default risk coverage to 15 participating financial institutions on loans to energy efficiency projects implemented by 40 ESCOs, 37 which are either empanelled by the Bureau of Energy Efficiency (BEE) or graded by rating agencies. The programme also provides technical assistance and capacity building to ESCOs.…”

Environment at a Glance in Latin America and the Caribbean

“…market regulation and price support for lower end-user price relative to the full cost of supply). The largest amount of government support is directed towards the production and consumption of petroleum (OECD, 2023 [58]). LAC countries have reduced (by 32%) government support to fossil fuels between 2012 and 2019, however, they more than doubled in 2021 compared to 2020 as energy prices rose with the rebound of the global economy.…”