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Climate finance

Copyright under Creative Commons by UNclimate change

Climate finance refers to the financial resources mobilised to help developing countries mitigate and adapt to the impacts of climate change, including public climate finance commitments by developed countries under the UNFCCC (Heinrich-Böll Stiftung North America, 2014).

There are a number of channels through which climate finance flows, including multilateral climate funds that are dedicated to addressing climate change.

Several multilateral funds, serving for funding measures related to climate change mitigation and adaptation, have been created under the UN Framework Convention on Climate Change and the Kyoto Protocol:

The Global Environment Facility (GEF), established in 1991, is an operating entity of the financial mechanism of the UNFCCC. Resources are allocated according to the impact of dollars spent on environmental outcomes, but ensuring developing countries have a share of the funding. This involves funding for mitigation (mainly renewable energy, energy efficiency, and sustainable transportation) and adaptation projects in developing countries and countries in transition.

The GEF also administers the Least Developed Countries Fund (LDCF) and the Special Climate Change Fund (SCCF). These funds support national adaptation plan development and their implementation, although largely through smaller scale projects.

Established under the Kyoto Protocol, the Adaptation Fund is orientated towards concrete adaptation programs and projects in developing countries that are parties to the Kyoto Protocol. It is generated by a 2% levy on carbon credits from CDM projects. It is operated by the Adaptation Fund Board and served by the GEF (secretariat) and the World Bank (trustee).

The newest, the Green Climate Fund (GCF), was agreed at the Durban COP, and is expected to become the primary channel through which international public climate finance will flow over time. The initial resource mobilisation process for the GCF is in its final stages, and GCF could begin to fund programmes and projects in late 2015. It is governed by the Green Climate Board comprising of 24 members, with equal numbers from developing and developed country Parties.

While a multitude of funding channels increases the options for recipient countries to access climate finance, it can also make the process more complicated. It becomes increasingly difficult to monitor, report, and verify (MRV) climate finance, as well as to account for its effective and equitable use (Heinrich-Böll Stiftung North America, 2014).

At COP15 in Copenhagen in 2009, developed countries committed to a goal of jointly mobilizing $100 billion dollars a year by 2020, from public and private sources. For strong future climate action, it is critical for these countries to present a credible and ambitious scenario on how they plan to meet the new and additional finance promise.


Gender dimensions

Given that gender is intricately linked to the effects of global climate change and climate responses, it is clear that gender dimensions need to be considered in the context of climate financing.  Indeed, the Cancun Agreements acknowledge that gender equality and the effective participation of women are important for all aspects of any response to climate change, but especially for adaptation.

The vast majority of climate funds have continually neglected gender issues and failed to incorporate a gendered perspective into programmes and projects. Research has indicated that without addressing gender dimensions and existing power imbalances, funding for climate actions will fail to address the needs of women, resulting in further marginalisation. These needs might include finance for technologies to reduce domestic burdens through to improving income generating activities, or capacity building.

On a more positive note, the new established Green Climate Fund has taken important steps to overcome this ‘gender-blindness’, by including a mandate to integrate a gender perspective from the outset.The governing instrument for the GCF includes several references to gender and women in the Fund’s objectives, governance and operational modalities, including on stakeholder participation. It also mandates gender balance for its staff and Board. Recent Board decisions relating to operationalisation request for a separate GCF gender policy and action plan to be formulated, as well as for gender considerations to be integrated in approved operational modalities and policies. Important steps for the future will be determined not only by how gender-responsiveness in funding climate actions is achieved, but also in terms of what is funded by the GCF.

Gender-sensitive spending includes, for instance, public infrastructures such as mass transportation for low carbon development, and water infrastructure for adaptation, as opposed to high-risk technologies and market-based activities.

At the national level, too, it is equally important to take gender perspectives into account, to provide equitable opportunities for women and men to voice their priorities and needs. This requires an institutionalised dialogue around national budget processes and national development plans.
Full and effective participation of women and men in decision-making in all phases and aspects of funding is essential, when designing, implementing, evaluating proposals, and reporting on programmes.

In general, women’s access to aid resources and in particular to market-based funding opportunities has been revealed to be limited compared to men’s. An OECD analysis of aid in support for gender equality reported, that "while aid for transport, communications and energy infrastructure accounted for a third of bilateral aid, little was reported as focused on gender equality. Nevertheless, well-designed infrastructure projects can bring significant positive benefits for women and girls by improving access to markets, schools and health services or by increasing women’s safety."


Recommendations

Gender-responsive climate financing instruments and funding allocations are needed. The GCF has the potential to create new best practice for gender-responsiveness in funding climate actions.

Adaptation funding must take into account the needs and requests of vulnerable groups, local communities and ecosystems, as well as the contributions of traditional and indigenous knowledge. It must be gender responsive, in terms of objectives, approaches, processes and actions; start at household and community levels and involve small-scale solutions.

Direct access to funds should be possible, including for sub-national actors, for instance local governments and community groups, guided by gender-equity considerations and involving women and women’s and gender groups as important stakeholders.

Gender justice should also play a role in defining future funding windows, priorities and programmes. Taking women’s preferences into account means that, for instance, risky technologies must be excluded from funding, and also processes that might harm low-carbon, climate-resilient and gender-equitable development objectives, or which reinforce stereotypical gender roles, add an extra burden on women, or violate human rights, including women’s human rights, in the recipient countries.

The application of gender budgeting and gender audits in all funds will ensure that the money invested will serve to improve the situation of women, as well as men.

When reviewing investments in programs for adaptation and mitigation, technology transfer, capacity building, etc., the SBSTA/SBI should also assess their contribution to social justice, and gender justice in particular. In order to measure progress, gender sensitive indicators must be developed.
Taking into account the vulnerability of women, a certain amount of all donor funds related to UNFCCC should be earmarked for activities and projects explicitly addressing women, and designed and implemented by women/gender experts.