Editing IPCC:AR6/WGIII/Chapter-15 (section)

=== Box 15.4 | Measuring Progress Towards the USD100 Billion yr –1 by 2020 Goal – Issues of Method ===

<div id="h2-28-siblings" class="h2-siblings"></div>

In 2009, at COP15, Parties to the UNFCCC agreed the following: ‘In the context of meaningful mitigation actions and transparency on implementation, developed countries commit to a goal of mobilising jointly USD100 billion a year by 2020 to address the needs of developing countries. This funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance’ ( [[#UNFCCC--2009|UNFCCC 2009]] ).

This goal is further embedded as a target under SDG 13 Climate Action. While the parameters for what and how to count were not defined when the goal was set, progress in this area has been achieved under the UNFCCC ( [[#UNFCCC--2019b|UNFCCC 2019b]] ) and via a UN-driven independent expert review ( [[#Bhattacharya--2020|Bhattacharya et al. 2020]] ).

There remain well documented interpretations and debates on how to account for progress ( [[#Clapp--2012|Clapp et al. 2012]] ; [[#Stadelmann--2013|Stadelmann et al. 2013]] ; [[#Jachnik--2015|Jachnik et al. 2015]] ; [[#Weikmans--2019|Weikmans and Roberts 2019]] ). Different interpretations relate mainly to the type and proportion of activities that may qualify as ‘climate’ on the one hand, and to how to account for different types of finance (and financial instruments) on the other hand. As an example, there are different points at which financing can be measured, for example, pledges, commitments, disbursements. There can be significant lags between these different points in time, for example disbursements may spread over time. Further, the choice of point of measurement can have an impact on both the volumes and on the characteristics (geographical origin, labelling as public or private) of the finance tracked. The enhanced transparency framework under the Paris Agreement may lead to improvements and more consensus in the way climate finance is accounted for and reported under the UNFCCC. Available analyses specifically aimed at assessing progress towards the USD100 billion goal remain rare, for example the UNFCCC SCF Biennial Assessments do not directly address this point ( [[#UNFCCC--2018a|UNFCCC 2018a]] ). Dedicated OECD reports provide figures based on accounting for gross flows of climate finance based on analysing activity-level data recorded by the UNFCCC (bilateral public climate finance) and the OECD (multilateral public climate finance, mobilised private climate finance and climate-related export credits) ( [[#OECD--2015a|OECD 2015a]] ; [[#OECD--2019a|OECD 2019a]] ; [[#OECD--2020b|OECD 2020b]] ). For 2018, the OECD analysis resulted in a total of USD78.9 billion, out of which USD62.2 billion of public finance, USD2.1 billion of export credits and USD14.5 billion of private finance was mobilised. Mitigation represented 73% of the total, adaptation 19% and cross-cutting activities 8%.

Reports by Oxfam provide a complementary view on public climate finance, building on OECD figures and underlying data sources to translate gross flows of bilateral and multilateral public climate finance in grant equivalent terms, while also, for some activities, applying discounts to the proportion considered as climate finance ( [[#Carty--2016|Carty et al. 2016]] ; [[#Carty--2018|Carty and Le Comte 2018]] ; Carty et al 2020). The resulting annual averages for 2015–2016 and 2017–2018 range between 32% (low bound) and 44% (high bound) of gross public climate finance. The difference with OECD figures stems from the high share represented by loans, both concessional and non-concessional, in public climate finance, that is, 74% in 2018 ( [[#OECD--2020b|OECD 2020b]] ).

A point of method that attracts much attention relates to how to account for private finance mobilised. The OECD, through its Development Assistance Committee, established an international standard to measure private finance mobilised by official development finance, which consists in methods tailored to different financial mechanisms. These methods take into account the role of, risk taken, and/or amount provided by all official actors involved in a given project, including recipient country institutions, thereby also avoiding risks of double counting ( [[#OECD--2019b|OECD 2019b]] ). MDBs apply a different method ( [[#World%20Bank--2018a|World Bank 2018a]] ) in their joint climate finance reporting (AfDB et al. 2020), which neither correspond to the geographical scope of the USD100 billion goal, nor address the issue of attribution to the extent required in that context.

Notwithstanding methodological discussions under the UNFCCC, there is still some distance from the USD100 billion a year commitment being achieved, including in terms of further prioritising adaptation. While the scope of the commitment corresponds to only a fraction of the larger sums needed ( [[#15.4|Section 15.4]] ), its fulfilment can both contribute to climate action in developing countries as well as to trust building in international climate negotiations. Combined with further clarity on geographical and sectoral gaps, this can, in turn, facilitate the implementation of better coordinated and cooperative arrangements for mobilising funds ( [[#Peake--2017|Peake and Ekins 2017]] ).

<div id="15.3.3" class="h2-container"></div>

<span id="fossil-fuel-related-and-transition-finance"></span>