The issue of ‘climate finance’, a key part of all climate negotiations, will definitely be a sticking point at the upcoming 26th United Nations (UN) Climate Change Conference, better known as COP26.
Context
The issue of ‘climate finance’, a key part of all climate negotiations, will definitely be a sticking point at the upcoming 26th United Nations (UN) Climate Change Conference, better known as COP26.
What is climate finance?
- Climate financerefers to local, national or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address climate change.
- The Convention, the Kyoto Protocol and the Paris Agreement call for financial assistance from Parties with more financial resources to those that are less endowed and more vulnerable.
Objectives of climate finance
- reducing emissions
- enhancing greenhouse gas sinks
- reducing vulnerability
- maintaining and increasing the resilience of human and ecological systems to negative climate change impacts
Why the world needs climate finance?
- Climate finance is needed for mitigation, because large-scale investments are required to significantly reduce emissions.
- Climate finance is equally important for adaptation, as significant financial resources are needed to adapt to the adverse effects and reduce the impacts of a changing climate.
Other important funds
- Global Environment Facility (GEF): The Global Environment Facility (GEF) has served as an operating entity of the financial mechanism since the Convention’s entry into force in 1994.
- Green Climate Fund (GCF): At COP 16, in 2010, Parties established the Green Climate Fund (GCF) and in 2011 also designated it as an operating entity of the financial mechanism.
- Special Climate Change Fund (SCCF)
- Least Developed Countries Fund (LDCF)
- Adaptation Fund (AF)
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