Progress in making ambitious emission reductions has been slow to-date. Climate finance can play a crucial role in assisting developing countries in making the transition to more environmentally sustainable systems of energy production and use, while also addressing developmental priorities of energy security and energy poverty. Currently, the largest sources of international public finance for climate mitigation in developing countries are the World Bank administered Clean Technology Fund (CTF) and the Global Environment Facility (GEF), while the EU’s Global Energy Efficiency and Renewable Energy Fund (GEEREF) and the World Bank’s Scaling up Renewable Energy Program (SREP) provide mitigation financing on a smaller scale. Operational since 2015, the Green Climate Fund (GCF) has increasingly become a major source of mitigation finance; in 2018, alone, it approved USD 897 million for mitigation projects. Currently about 51% of the financing approved since 2003 flowing from the dedicated climate finance initiatives that CFU monitors is approved for mitigation activities (excluding REDD+), largely to support the development and deployment of renewable energy and energy efficiency technologies in fast growing countries. The cumulative amount of total finance approved for mitigation from climate funds is USD 9.8 billion as of December 2018.
This is a 2018 update of Climate Finance Fundamentals Brief #4.