Multilateral climate funds: Where is inclusive, sustainable economic transformation being promoted?

Key Messages

Climate actions supported by the multilateral climate funds (MCFs) align with environmental, economic and social goals. However, securing these goals requires action at many levels, from the household level to the national economy. Any action that does not provide for linkages across these scales is unlikely to bring about sustainable change.
MCFs are developing conceptual frameworks that are relevant to understanding the environmental, economic, and social nexus. Such frameworks, which build on early characterisations of the relationship between economic, social and environmental goals, are necessary if progress is to be made in designing effective interventions that address all nexus concerns in a balanced way.
Diverse partnerships and strong analytical and implementation capacity are required to address nexus concerns, as these are embedded within highly complex and dynamic systems. It can take time to build the necessary partnerships and skill sets.
MCFs are demonstrating there is scope to build complementarity between project and programmatic approaches to advance environmental, economic, and social goals if the programmatic framing and individual projects interventions are aligned.
MCFs are building experience on the optimal use of different financial instruments in responding to nexus concerns. In particular, the deployment of equity finance and concessional lending to promote economic transformation reflects the fact that, in many countries, economic activity is led by the private sector.
Implementation delays of MCF investments are presently limiting the scope for ex-post analysis of their impact in the climate, economic and social nexus. Delays caused by inefficient internal processes have led to much frustration over MCF delivery.

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Authors

Neil Bird

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