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Catalysing climate finance: a guidebook on policy and financing options to support green, low-emission and climate-resilient development

Publication date:
Y. Glemarec (ed)
Type of publication:

The scale of the climate change challenge that faces the international community is vast. In the absence of a significant reduction in global greenhouse gas emissions from current levels between now and 2050, global average temperatures could rise by 4°C, and possibly more, by 2100. It will also necessitate significant support, especially to the most poor and vulnerable people in developing countries, to strengthen adaptation measures and improve community adaptive capacity. This guidebook draws upon the experience and information generated by the United Nations Development Programme’s support for climate change adaptation and mitigation projects over the past decade. It is intended for the public development practitioner at the national and sub-national levels, and domestic and international experts assisting governments with finance for climate investment and sustainable development issues.The guidebook brings out a variety of methodologies in the preparation of green, low-emission and climate-resilient development strategies. It offers the following detailed step-by-step guidance for the identification of key stakeholders and establishment of participatory planning and coordination frameworks:

Generation of climate change profiles and vulnerability scenarios.
Identification and prioritisation of mitigation and adaptation options.
Assessment of financing requirements.
Development of low emission climate-resilient roadmaps for project development, policy instruments, and financial flows.

To facilitate the above, the guidebook presents the following UNDP four-step framework to identify an appropriate public policy mix to attract and drive capital toward green, low-emission and climate-resilient development:

Identify priority mitigation and adaptation technologies options.
Assess key barriers to technology diffusion.
Determine appropriate policy mix.
Select financing options to create an enabling policy environment.

The guidebook concludes that the critical challenge for the international community in the coming decade will be to enhance the capacity of developing countries by addressing the following challenges:

Policies do not operate in a vacuum – attempts should be made to reduce investment risks, simplify administrative processes and improve consumer information before embarking on more expansive public policy instruments such as subsidies, soft loans or loan guarantees.
The need for dedicated efforts to promote synergies between development and climate finance, including poverty reduction and sustainable livelihoods, biodiversity conservation, carbon sequestration, sustainable water management, enhanced ecosystems resilience and ecosystem-based adaptation.
The importance of using international public climate finance strategically which entails developing the capacity of low-income countries to create conditions that allow markets and private investment flows to address pressing environmental problems.