Climate Deal 2015

Climate Finance Builds Momentum in Latin America

This December 6th, 2014 was an important day for climate finance in Latin America. A group of organizations including WRI, AIDA, Climate Interactive, the Carbon Tracker Initiative, E3G, and GFLAC organized the Latin America and the Caribbean (LAC) Climate Finance Day in parallel with the climate negotiations in Lima.

Some of the speakers included Naoko Ishii – CEO of the Global Environment Facility (GEF); Carolina Fuentes Castellanos – Board Secretary of the Green Climate Fund (GCF); Gabriel Quijandria – Board Member of the GCF and Vice Minister of Environment of Peru; as well as Sean Kidney – CEO and Cofounder of Climate Bonds Initiative.

A wide range of regional stakeholders including representatives from governments, national and international financial institutions, private sector, academia, and civil society discussed, among other things:

  • National and institutional strategies to mobilize investments in low-carbon, climate-resilient development;
  • The expected role of the GCF in promoting transformational change in the region;
  • Best practices to enhance transparency and accountability for the use of climate finance; and
  • Tools to assess and integrate climate change risks into investment decisions.

The dialogue highlighted some key gaps in addressing the climate challenge in Latin America and specific ways to move forward. What was discussed?

  • Business can play a critical role in advancing climate objectives. Many governments in the region are actively looking for ways to engage the private sector and leverage private climate investment. Several participants stressed the importance of promoting public-private-partnerships and dialogues with the domestic financial sector to design strategies and increase the number of projects and programs that support development and climate objectives. This includes cross-sector coordination among government agencies, academia, and private institutions. For example, Colombia created SISCLIMA, an institutional framework to coordinate the use and management of climate finance. The domestic financial sector also takes part in SISCLIMA to promote dialogue and synergies between the public and private sectors.
  • Limited access to information to citizens on the use of climate finance at the national and local levels is a problem. Information on how climate finance is used and whether it is reaching its intended beneficiaries is not transparent or accurate in most countries. National governments and civil society organizations have advanced a number of initiatives to create clarity on these issues and to promote transparency and accountability. For example, Mexico is working to identify the portion of the public budget allocated to climate change activities at the federal level. Additionally, civil society organizations members of the Latin American and the Caribbean Climate Finance Group (GFLAC) in Argentina, Chile, Ecuador, Mexico, and Peru are mapping information about climate finance flowing both, from international cooperation and from national public sources in order to improve transparency, but mainly in order to build a robust system to monitoring, reporting and verifying the effective use of climate finance.
  • Lack of investment in research & development (R&D), in particular in relation to clean technology in the region delays progress. Support for ambitious policy frameworks that promote investment in R&D in this sector was highlighted in the discussions.

The LAC Climate Finance Day allowed participants in governments and civil society to share experiences and test new ideas on climate finance. This model of debate based on multi-stakeholder views provided could help replicate successful experiences in other countries in Latin America and around the world.

Clearly, the road to an international climate agreement is complex and climate finance is a contentious issue. Yet, the growing number of innovative initiatives taking place in the LAC region to respond to the climate change challenge offers reason for optimism in 2015. For this reason, a wide variety of actors, international, national, and local, would benefit from following the exciting steps taking place in the region. 2015 will be key for the region and the multi-stakeholder dialogue on climate finance should continue.

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