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International Climate Finance: Principles for European Support to Developing Countries

Working paper

Written by Neil Bird

Working paper

The commitment to provide new finance in support of climate change actions in developing countries was one of the few areas where tangible progress was made at the Copenhagen COP meeting. The estimates of global needs for climate finance are considerable and it is expected that the requirement for funding will see a significant upwards trajectory over the next decade. Despite considerable uncertainties, the European Commission’s own estimates suggest that up to €15 billion of additional public financing will be required each year from the EU by 2020 to support both mitigation and adaptation needs in developing countries. As new funding initiatives have been established, a number of principles have been proposed to assess their relative worth. However, little emphasis has been given to how these principles might fit together in a coherent, over-arching framework. This paper proposes such a framework and describes the criteria and indicators by which compliance with the principles could be assessed. It identifies three sequential phases that relate to the mobilisation, administration and disbursements of funds, examining the principles, criteria and indicators that are relevant for each of these three phases. The paper concludes that Much would be gained if the international community were to adopt a set of principles for climate change in the same way that the development cooperation community built confidence between developed and developing countries through the Paris Declaration on Aid Effectiveness.

Neil Bird, Jessica Brown