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

Context: The recently released analysis by the Climate Policy Initiative revealed that climate finance flows have doubled compared to previous years but have been unevenly distributed across geographies and sources.

• Climate Policy Initiative’s (CPI) new report Global Landscape of Climate Finance 2023 brings together the latest data and analysis in this regard.

Highlights of Report

• The report breaks down the flow of climate finance by its application, geographical distribution and sources, using data from 2021 and 2022.
• CPI has been tracking global climate finance flows between all countries and entities for a decade now, making these updates important for the global climate conversation.
• The increase in annual average climate finance over the years was driven primarily by the escalation in mitigation finance, which has increased by $439 billion from 2019 and 2020.
• The report noted particularly improved coverage of finance data from three sectors — agriculture, forestry and other land use (AFOLU); buildings and infrastructure; and waste.

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 Agreements: The UNFCCC, Kyoto Protocol, and the Paris Agreement have collectively established a duty for financially prosperous Parties (Developed Countries) to offer support to economically disadvantaged and vulnerable Parties (Developing Countries).
• Accordance with CBDR Principle: This responsibility aligns with the fundamental principle of "Common but Differentiated Responsibility and Respective Capabilities" (CBDR), ensuring equitable contributions in addressing climate change.
• Facilitating Adaptation: It aids communities in addressing climate change effects by providing straightforward remedies. 
• For instance, the utilization of resilient seeds enables farmers to sustain food production, even in the midst of drought conditions.