Climate Finance in and between Developing Countries: An Emerging Opportunity to Build On
| Author | Peter Ogden,Sangjung Ha,Thomas Hale |
| Published date | 01 February 2016 |
| Date | 01 February 2016 |
| DOI | http://doi.org/10.1111/1758-5899.12293 |
Climate Finance in and between Developing
Countries: An Emerging Opportunity to Build
On
Sangjung Ha and Thomas Hale
Blavatnik School of Government
Peter Ogden
Center for American Progress
Abstract
The United Nations Framework Convention on Climate Change (UNFCCC) negotiations are evolving to reflect changes in
national and global economic circumstances. However, this shift has been far smaller in the critical issue of climate finance,
which remains too mired in an increasingly antiquated North–South, developed–developing country dichotomy. This inertia
poses a serious threat to our ability to mobilize the finance required to meet the climate challenge, and could hamstring the
new climate agreement countries are seeking. However, an important new trend can help move this discussion forward: the
rise of climate finance within and among developing countries. Far from diminishing the need for developed countries to
increase their support for mitigation and adaptation in developing countries, so-called ‘South-South Climate Finance’(SSCF)
can help unlock much needed additional resources for the climate challenge. This article provides an initial mapping of SSCF
and argues that: (1) the emergence of SSCF offers countries an opportunity to mobilize additional climate finance, including
through multilateral development banks (MDBs); and (2) parties to the UNFCCC should track and foster the role of SSCF so as
to more effectively align it with ‘traditional’climate finance that flows from developed to developing countries.
One of the world’s largest solar plants will open in Pakistan’s
Punjab province this year, eventually providing 300 MW of
much needed power to businesses and households in the
region (Shaikh, 2015). While the Quaid-e-Azam Solar Power
Park will deliver an immediate benefit to the people of Pun-
jab, the trend it represents presents an even bigger oppor-
tunity for the world’s struggle against climate change. Built
by a Chinese company and financed with support from Bei-
jing, the solar plant rising in Punjab signals an important
new chapter in global climate finance.
It is evident that reducing greenhouse gas (GHG) emis-
sions and achieving sustainable, long-term economic growth
will require large amounts of new investment. Precise fig-
ures are difficult to estimate because of uncertainty around
climate impacts, emerging technologies and broader eco-
nomic factors. But all major studies (see below) show that
the world is spending far less than what is required to build
low-carbon, resilient economies.
Marshaling such resources is a core objective of the Uni-
ted Nations Framework Convention on Climate Change
(UNFCCC). In 2009, developed countries pledged to mobilize
US$100 billion per year from public and private sources to
finance adaptation and mitigation activities in developing
countries (UNFCCC, 2009). And a new international financial
institution, the Green Climate Fund (GCF), has been created
to help to achieve this. Even if this money is indeed mobi-
lized, and even if the GCF and other institutions can effec-
tively channel it, a wide gap will remain between what is
available and what is needed.
New solutions and smarter investments are required. But
the climate finance discussion in the UNFCCC is still largely
mired in antiquated and acrimonious ‘North–South’, devel-
oped–developing, donor–recipient, public–private disputes
that do not reflect today’s more complicated global eco-
nomic reality. Gridlock over finance, in turn, can spill into
other issues, and therefore poses a threat to achieving a
successful outcome in Paris and beyond.
Meanwhile, outside of the halls and conference rooms of
the UNFCCC, important but often overlooked new develop-
ments are happening on the ground. As developing countries
grow and play a larger role in the world economy, they are
increasingly financing and supporting low carbon, resilient
development at home and in other developing countries –
which in turn opens up opportunities for additional climate
assistance and investment from developed countries. This
phenomenon has yet to be explored in depth by the aca-
demic or policy communities, but offers significant potential
to reshape the global politics of climate change. In this article,
we provide an initial mapping of the emerging landscape of
climate finance within and between developing countries –so
called South-South Climate Finance (SSCF) –showing that it is
rapidly growingand taking a variety of new institutional forms.
©2015 University of Durham and John Wiley & Sons, Ltd. Global Policy (2016) 7:1 doi: 10.1111/1758-5899.12293
Global Policy Volume 7 . Issue 1 . February 2016
102
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