Climate funding complex subject: UNDP official
UNDP director for international finance Yan-nick Glemarec speaks to Rashme Sehgal.
Q. When do you see the Green Climate Fund finally seeing the light of day?
A. Climate funding is a very complex subject because the global financial architecture for this remains very complex. There are at present over 15 international public funds, over 50 carbon markets and over 1,000 equity funds which invest only in energy. Apart from several other financing mechanisms which invest in this (climate) area.
There are lots of different funds but a great deal of frustration on the project proposal side which has to meet strict eligibility criterion. It is very difficult to know which fund exists and which is the most appropriate. To develop the documentation on how to access them is also very difficult.
I must reiterate that capital markets are very complex and climate finance is difficult to access since funding is being provided in a variety of fields whether it be water, transport or urban infrastructure. With many countries lacking the capacity for combining and sequencing different sources of funding, the UNDP recommendation is not to start with climate funding but to start with national priorities. Its easier to figure out what kind of priorities exist and what funds are eligible for meeting these development objectives. Once this is in place, they (nations) can do an overall financial engineering.
Once they nati-ons can demonstrate an initiative fits the national criterion and that their objectives are in line with poverty alleviation, then getting the requisite finance bec-omes that much easier.
Q. What kinds of climate funding is available presently?
A. Current finance sources include the GEF Trust Fund, the special Climate Change Fund, the Least Developed Countries Fund and the Clean Development Mec-hanism. Transition towards low carbon economies needs to be initiated with the right mix of polices and capacities.
Q. How is India faring in gaining access to climate change funding ?
A. The common feature amongst all the BRICS (Brazil, India, China and South Africa) countries is that they have developed very sophisticated climate policies. India has set up eight climate-related missions while China has 12 in place. The overall objective is to mainstream climate issues into the national plan. They have also invested a great deal in capacity development of local officials in the area of climate adaptation.
Q. The Stern report had highlighted that mitigation activities would require at least $ 600 billion per annum while adaptation measures would require at least $400 billion per annum. How will this kind of money be raised?
A. My experience is that capital markets are never simple. Apart from private investments, technology cooperation and diffusion needs to rely on various types of environmental financé such as ODAS, equity finance ,etc. Even though the funds available from various sources such as GEF seem small, it is possible to use finances strategically to create a policy environment in which an unviable low carbon project becomes an attractive low carbon project.
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