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

=== Box 15.2 | International Climate Finance Architecture ===

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International climate finance can flow through different bilateral, multilateral, and other channels, involving a range of different types of institutions both public (official) and private (commercial) with different mandates and focuses. In practice, the architecture of international public climate finance is rapidly evolving, with the creation by traditional donors of new public sources and channels over the years ( [[#Watson--2019|Watson and Schalatek 2019]] ), as well as emergence of new providers of development co-operation, both bilateral ( [[#Benn--2017|Benn and Luijkx 2017]] ) and multilateral (e.g., Asian Infrastructure Investment Bank), as well as of non-governmental actors such as philanthropies ( [[#OECD--2018a|OECD 2018a]] ).

The operationalisation of the Green Climate Fund (GCF), which channels the majority of its funds via accredited entities, has notably attracted particular attention since AR5. [[IPCC:Wg3:Chapter:Chapter-14#14.3.2|Section 14.3.2]] (in Chapter 14) provides a further assessment of progress and challenges of financial mechanisms under the United Nations Framework Convention on Climate Change (UNFCCC), such as the GCF, the Global Environment Facility (GEF) and the Adaptation Fund (AF).

The multiplication of sources and channels of international climate finance can help address growing climate-related needs, and partly results from increased decentralisation as well financial innovation, which in turn can increase the effectiveness of finance provided. There is, however, also evidence that increased complexity implies transaction costs ( [[#Brunner--2014|Brunner and Enting 2014]] ), in part due to bureaucracy and intra-governmental factors ( [[#Peterson--2019|Peterson and Skovgaard 2019]] ), which constitutes a barrier to low-carbon projects and are often not accounted for in assessments of international climate finance. On the ground, activities by international providers operating in the same countries may overlap, with sub-optimal coordination and hence duplication of efforts, both on the bilateral and multilateral sides ( [[#Ahluwalia--2016|Ahluwalia et al. 2016]] ; [[#Gallagher--2018|Gallagher et al. 2018]] ; [[#Humphrey--2019|Humphrey and Michaelowa 2019]] ), as well as risks of fragmentation of efforts (Watson and [[#Schalatek--2020|Schalatek 2020]] ) which slows down coordination with international providers, national development banks and other domestic institutions.

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