Publication:
Strategic Use of Climate Finance to Maximize Climate Action: A Guiding Framework

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Published
2018-09
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2018-10-01
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World Bank Group
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Abstract
Achieving the goals of the Paris Agreement requires countries to finance transformational changes with significant investments in both mitigation and resilience-building. International public climate finance with some degree of concessionality (i.e., climate finance) makes it possible to provide grants or loans with reduced interest rates and/or longer grace or repayment periods. Given the scarcity of climate finance, this paper proposes a framework for determining the appropriate degree of concessionality for a program/project, and for prioritizing programs/projects for climate action. To maximize the impact of climate finance, the degree of concessionality allocated to a program/project should be equal to what is needed to overcome the identified barriers to implementation and make the program/project viable. In parallel, the framework prioritizes programs/projects that are ambitious and transformational. Ambitious projects contribute significantly to achieving the objectives of the Paris Agreement. A program/project is transformational if it meaningfully reduces barriers to implementation for future programs/projects that will decrease emissions or boost resilience. The paper illustrates how the three dimensions (i.e., barriers to implementation, ambitious, and transformational) can be qualitatively assessed at four levels for a given mitigation or resilience-building program/project and recommends future work to operationalize the framework into decision-making processes.
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World Bank Group. 2018. Strategic Use of Climate Finance to Maximize Climate Action: A Guiding Framework. © World Bank. http://hdl.handle.net/10986/30475 License: CC BY 3.0 IGO.
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