Critical issues for Channelling Climate Finance via Private Sector Actors – Briefing commissioned by the UK Bond Development and Environment Group with support from Bretton Woods Project, CAFOD, Christian Aid, Tearfund, UNICEF UK, World Development Movement, March 2013
Policymakers are now exploring ways to encourage private sector finance for climate action in developing countries, i.e. investment in projects to reduce greenhouse gas emissions and build capacity to adapt to climate change impacts. The UK’s recently launched Climate Public Private Partnership (CP3) is one such example. Using public funds to leverage private finance is also an option being considered in allocating some of the funds channelled through the new Green Climate Fund, where a Private Sector Facility is now being developed. Whatever the source and channel of climate finance, it is vital to ensure that adequate and reliable climate finance reaches the poorest and most vulnerable people, that its impacts can be clearly evaluated and monitored, and that adequate social, environmental and human rights safeguards are in place to protect recipient communities. Finally, there must be clear accountability to the taxpayer for the use of any public monies.
This paper examines the evidence from existing channelling of development and climate finance via private sector instruments to identify the probable risks and benefits of such approaches. The particular aim of this paper is to stimulate debate within the UK context.
Contact: Dr Sarah Wykes, Lead Analyst – Environment and Climate Change, CAFOD, swykes(at)cafod.org.uk
CAFOD is CIDSE’s member in England and Wales