CLIMATE FINANCE (Syllabus: GS Paper 3 – Env and Eco)

Context: Recently, money pledges stacked up at COP28 in Dubai as delegates sought to address the huge gap between what is needed in climate finance and the amounts so far on offer.

Climate Finance

• About: Climate financing encompasses various funding sources, whether local, national, or transnational, that aim to facilitate climate change mitigation and adaptation efforts, drawing from public, private, and alternative channels.

Global Climate Financial Mechanisms

• Global Environmental Facility: The GEF, established on the eve of the 1992 Rio Earth Summit, is a catalyst for action on the environment. Through its strategic investments, the GEF works with partners to tackle the planet's biggest environmental issues.
• Least Developed Countries Fund (LDCF): The LDCF was established in 2001 to support a work programme to assist LDCs carry out, inter alia, the preparation and implementation of national adaptation programmes of action (NAPAs).
• Special Climate Change Fund: It was created in 2001 to address the specific needs of developing countries under the UNFCCC to adapt to the impact of climate change and increase resilience. 
• The Adaptation Fund (AF): The AF was established in 2001 to finance concrete adaptation projects and programmes in developing country Parties to the Kyoto Protocol that are particularly vulnerable to the adverse effects of climate change.
• Clean development mechanism: The CDM, defined in Article 12 of the Protocol, allows a country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol (Annex B Party) to implement an emission-reduction project in developing countries.
• The Green Climate Fund (GCF): It was set up in 2010 under the UNFCCC’s financial mechanism with aim to expand collective human action to respond to climate change. 
• Importance: Climate finance in addressing global climate change challenges and promoting sustainable development.