National Climate Funds Learning from the experience of Asia-Pacific countries

Addressing challenges posed by climate change requires significant financial resources. In the growing literature of climate change, “climate finance” refers to financial resources required to cover the costs of climate actions and investments2. Climate finance is complex because of the diversity of sources of funds, agents and channels to distribute the funds to intended beneficiaries at different levels and scales. The expected scale of climate finance is also significant. Developed countries have committed to mobilize new and additional resources for climate investments. It has been agreed at COP 15 in Copenhagen that as much as US$ 30 billion for 2010-2012 and US$ 100 billion by 2020 is to be mobilized to assist developing countries to cover the costs of climate mitigation and adaptation. The committed resources, however, are much lower than the estimated amount required to finance mitigation and adaptation actions. Estimates vary from around US $140-175 billion and $70-100 billion per year for the period of 2010-2050.3 Uncertainties remain on how the funds will be raised, managed and disbursed. One of the mechanisms to manage and channel international finance is the recently created Green Climate Fund (GCF). The GCF is expected to support projects, programs, policies, readiness and other activities in developing countries. The operational policies and modalities, including how countries can access the fund, are currently being negotiated.