Effective Climate Finance – Experiences in Latin America and the Caribbean

In a few weeks the next Conference of the Parties (COP) of the Convention United Nations Framework on Climate Change (UNFCCC) will be launched in Qatar. One of the key themes of this year’s global gathering will be climate finance and in particular the Green Climate Fund (GCF), which will be hosted the Republic of Korea. The GCF strives to become one of the main channels for the 100 billion USD that developed countries agreed to provide annually by 2020, in order to fund adaptation and mitigation actions in developing countries. In this context, a fundamental question arises: How can countries get prepared to use these resources in an effective and sustainable manner?

Responding to these questions, 92 representatives from 26 countries met in May 2012 in the Honduran city of Tela to hold the First Latin American and Caribbean Dialogue on Effective Climate Finance. Bringing together practitioners from various ministries (including Environment, Development, Finance, and Foreign Affairs), the dialogue was built on the exchange of experiences, innovations and practical solutions designed by developing countries.

This knowledge exchange led to encouraging results. The region has made significant progress in the area of climate finance management, by developing specific coordination mechanisms, designing and using innovative financial instruments, and promoting interesting examples of public-private partnership, among others. However, in several areas work remains to be done and needs to be met. In particular, there is a strong demand for support in the implementation of robust systems for measuring, reporting and verification. Moreover, it is important to make progress in managing National Climate Funds, and appropriate long-term financial instruments. These instruments should ensure that international sources complement national sources in order to address the magnitude of the climate change effects on our countries.

Summarizing this wealth of experience, a recently released report (see [pdf]) offers insights into the lessons learned during the mutual learning sessions of the Dialogue. This report is extremely useful, not only to disseminate the high quality of the debates, but as a reference for our national processes and opportunities for international knowledge exchange. It also recognizes the progress made at the country level, and has the potential to inform global decisions with the national realities.

Indeed, this report is one of the initial results in the regional process initiated in Honduras, opening a horizon for much-needed mutual learning. Currently, a number of countries are deepening the analysis of the barriers to accessing, managing and accounting for climate finance. National capacities and systems need to develop further, while external contributions should become more meaningful to the process of national institutions. Colombia, El Salvador and Peru will share their experiences in this area during a side event at COP 18 in Qatar, and in early 2013, a workshop will provide a space for exchange on national climate finance instruments.

The continuity of this process as a regional long-term initiative will depend on the willingness of the practitioners involved in the governments of our countries and on the support from the international community. It is critical to keep on track towards an increasingly effective management of climate finance from both national and international sources. Indeed, knowledge exchange among our countries might help build an efficient climate finance system. This is immediately relevant to our commitment with a true paradigm shift towards a path of development which is sustainable, clean and resilient to the effects of climate change.

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To see the full report on Effective Climate Finance in Latin America and the Caribbean, click here [pdf].

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This blog post is a collaboration of Isabel Cavelier Adarve and Nils-Sjard Schulz. Isabel Cavelier Adarve is adviser on environmental issues at the Ministry of Foreign Affairs of Colombia, and chief negotiator of the Colombian delegation for climate finance under the UNFCCC. The author writes in a personal capacity, and the views and considerations reflected in this blog post do not involve in any way those of the Ministry of Foreign Affairs. Nils-Sjard Schulz is policy advisor and member of the MultiPolar network that supports the regional process on climate finance in Latin America and the Caribbean, and has advised the Government of El Salvador in the development of the study of barriers.