Climate finance aims to support developing countries in tackling anthropogenic climate challenges. This finance may be used for adaptation or mitigation purposes, or a combination of both. These global climate finance categories are explained in more detail below.
Financing of adaptation is aimed at minimising the negative impact of climate change on the living conditions in developing countries. A very specific example of adaptation is dyke construction along the coast. Adaptation measures help developing countries to build resilience against the impact of climate change. For example, many African countries are still very dependent upon smallholder agriculture, an economic activity which is particularly vulnerable to climate change, soil erosion and natural disasters. Investment in drought resistant crops, improved irrigation techniques, modified cultivation techniques, integrated water management, etc. help farmers to adapt to a changing climate. Adaptation is not restricted to the agricultural sector, or the economic sector. It can involve a whole range of sectors.
Mitigation measures are aimed at limiting greenhouse gas emissions. Climate finance for mitigation may focus on green energy, energy efficiency, carbon capture and storage, among other things. It is an undeniable fact that, as their economies continue to grow strongly, the developing countries' share in global emissions is increasing. If these countries ¬were to go through a similar industrialisation process as that of Western countries during the 19th century, our climate would be facing huge global warming. Because the developing countries have less technical and financial resources to reorient their expanding economies to low-carbon growth, they are calling for climate finance.
Mitigation and adaptation (cross-cutting)
Climate finance may also respond to both objectives simultaneously (prevention of and adaptation to climate change). For example, multilateral contributions are made to the Green Climate Fund, the United Nations fund which invests in both adaptation and mitigation. Another example is agroforestry investment, which enables developing countries to set up climate proof activities, prevent further desertification and contributes to a decrease of greenhouse gas emissions.
Climate finance is not the same as emissions trading. Under international climate policy, whenever industrial countries reduce emissions in developing countries, this helps them achieving their own emission reduction goals. Emission credits coming from the clean development mechanism may be counted as emission reduction. This makes emission allowances one of many tools of domestic climate policy.
Climate finance, on the other hand, implies an additional commitment to provide financial support to developing countries, without the donor receiving emission allowances in return. This commitment is part of industrialised countries’ environment and development policies. It is aimed at the following objectives:
1/ reducing global greenhouse gas emissions
2/ greater involvement of developing countries in the international climate policy
3/ increasing development opportunities in the South in the context of climate change
Belgium’s commitments to climate finance are based on the December 2015 national climate agreement (concerning the implementation period 2013 to 2020). Under this agreement Flanders has committed to investing 14.5 million euros per annum in climate finance from 2016.
Under the impulse of international commitments from the UN climate summits member states are increasingly engaged in international climate finance. However, currently no international uniform methodological directives exist to measure climate finance. It is the responsibility of each individual member state to examine the relevance of each contribution to climate change in developing countries. Flanders subscribes to the approach of many other European donors. According to that method donors screen each project carefully for relevance to climate adaptation and mitigation. On the basis of this assessment Flanders gives three different scores to its climate finance contribution. Each score also defines the aid volume which is relevant to the reporting on climate finance.
The Flemish climate finance contributions mainly derive from the Flanders Foreign Affairs Policy Area, the Environment, Nature and Energy Policy Area and the Economy, Science and Innovation Policy Area.
FL Climate Finance 2013 – 2015 : a detailed list of the efforts of the Government of Flanders on international climate finance since 2013. The second worksheet contains data analyses, which classify climate finance according to type (mitigation, adaptation, cross-cutting), theme (water, land, agriculture, ...) and channel (bilateral, multilateral, bi-multi).
European Commission on climate finance
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