International climate finance
Significant financial resources will be needed to help developing countries deal adequately with climate change, both to reduce greenhouse gas emissions and to adapt to the consequences of climate change. The European Union is the largest contributor of climate finance to developing countries and the world's biggest aid donor, collectively providing more than half of global official development assistance (ODA). Climate change is being increasingly integrated into the EU's broader development strategy.
The EU’s Global Climate Change Alliance (GCCA) initiative provides technical and financial support to developing countries to integrate climate change into their development policies and budgets, and to implement projects that address climate change on the ground. The GCCA is also a platform for dialogue and exchange of experience.
'Fast start' finance: the EU has delivered
At the climate conferences in Copenhagen (2009) and Cancún (2010), the EU and other developed countries pledged jointly to provide nearly $30 billion in 'fast start' finance to developing countries in 2010-2012 to support immediate action on the ground. They also committed to mobilise $100 billion a year by 2020 from a variety of sources.
The EU and its Member States pledged €7.2 billion in fast start finance over 2010-2012, almost one-third of the total pledged by developed countries. Despite difficult economic circumstances, the EU met and even surpassed its commitment by providing €7.34 bn in fast start finance. This money is being spent on concrete climate actions in developing countries.
Climate finance continues
The EU continues to provide climate finance to developing countries, supporting in particular the most vulnerable developing countries, including the small island developing states, the least developed countries and Africa, in adapting to the consequences of climate change.
For the medium to long term, developed countries have jointly pledged to mobilise climate finance of $100 billion a year by 2020 and the EU remains fully committed to this goal. This money should come from a wide variety of sources and depends on meaningful mitigation action and transparency on implementation by developing countries.
Using varied sources of financing
The EU considers that both public and private flows are indispensable elements of climate finance. Further efforts must be made to mobilise alternative sources of climate finance and private contributions. International climate finance should be used as a lever to incentivise climate-resilient and low-carbon investments, complementing domestic resources in developing countries.
The EU and its Member States have set out their strategies and approaches for mobilising scaled-up climate finance as a contribution towards meeting the developed countries' commitment for 2020. This will be an 'iterative process', meaning that scaling up climate finance will go hand-in-hand with solid preparatory work in both developed and developing countries.
Making the Green Climate Fund operational
It is expected that a significant amount of future international climate funding will be channeled through the Green Climate Fund (GCF), which became operational in May 2014. The fund will play a key role in channeling financial resources to developing countries and will catalyse climate finance, both public and private, at the international and national levels. Overtime, it aims also to establish a 50:50 balance in allocation of resources to climate mitigation and adaptation.