With developing countries anticipating the flow of billions of dollars from developed countries to address the devastating impacts of climate change, it is important to recognise that the amounts of funding, the number of institutions involved and coherence in the global architecture will be meaningless without there being democratic governance of the funds at the local level. The hopes of vulnerable people in developing countries around the world will thus be dependent on funding that is mobilised, managed and disbursed in a just and effective manner in national and subnational contexts.

Country experiences with three climate change funds are discussed in this paper. These include the Adaptation Fund with reference to Senegal, the Clean Development Mechanism (CDM) as it applies to Chile, Thailand, the Philippines and South Africa, and Reduced Emissions from Deforestation and Forest Degradation (REDD) as applicable to Brazil, Cameroon, Peru and Tanzania. The most striking and perhaps the most contentious features of fund governance are described to illustrate key problem areas and to make recommendations for resolving these. Good practice is also referred to in part.

The context for this briefing paper is a civil society meeting hosted in Cape Town in September 2010 by the Corruption and Governance Programme of the Institute for Security Studies (ISS), where experts based in Africa, Asia and Latin America presented papers discussing the regional contexts and the national and subnational experiences with climate change funds in their regions. The papers presented have been compiled into an ISS report on monitoring the governance of climate finance. The study provides an approach that is grounded in the realities and experiences in funding arrangements across developing countries in the three regions studied. The issues raised here reflect on some of the findings of that report.

This briefing paper is the second in a series of three. The first comprises critical reflections on regional trends in climate finance, while the third will present the priorities and principles required for developing a just and effective system of climate change finance at national and subnational levels.