Download Meeting report - Adaptation Futures 2016

Issue 10. Finance, investment and business
PR 10.5
Organised by
Partners
Chair
Rapporteur
Presenters
Bridging the gap: initiatives for better access to climate finance in Latin America
Johannes Karremans, EUROCLIMA Programme, European Commission, Belgium
Economic Commission for Latin America and the Caribbean (ECLAC), Chile
Organisation for Economic Co-operation and Development (OECD), France
Johannes Karremans, Director Technical Assistance EUROCLIMA Programme (European
Commission), Belgium
Guillermo Dascal, EUROCLIMA Programme (European Commission), Belgium
Joseluis Samaniego, United Nations Economic Commission for Latin America and the
Caribbean (UN-ECLAC), Chile
Horst Pilger, European Commission, Belgium
Gisela Campillo, Organisation for Economic Co-operation and Development (OECD), France
Cristobal Reveco, EUROCLIMA consultant, Adapt, Chile
Bastiaan Louman, EUROCLIMA consultant, Tropical Agricultural Research and Higher Education
Centre (CATIE), Costa Rica
Climate finance in Latin America and the Caribbean. Where lies the focus?
Joseluis Samaniego, United Nations Economic Commission for Latin America and the Caribbean (UN-ECLAC),
Chile
There are many definitions and methodologies used in climate finance and many actors at different levels. The
data are difficult to obtain. The most important actors are local Development Banks, bilateral initiatives from
developed countries, Multilateral Banks, the International Finance Corporation, the Global Environmental
Facility (GEF), Climate Investment Funds and Adaptation Funds. Also Clean Technology Fund, Strategic Climate
Fund, IADB, WB, the private sector and Local Trust Funds like the Amazon Fund.
Most financing instruments use concessional (77%) and non-concessional loans (15%). 2013-2014 climate
finance in LA grew 7%, worldwide 18%. Of funds provided by Latin American regional and national
development banks in 2014, 84.1% were allocated to mitigation and 7.9% for adaptation. International climate
funds are also mostly oriented to mitigation (83.8%) rather than adaptation (16.2%).
One of the most relevant problems is that climate financing is substituting mainstream financing, including
financing for development. Lower rates of discount are needed for longer-term investments. Lastly, there is
weak or non-risk internalisation of climate change in Latin American countries.
Fostering effective adaptation finance in Latin America: EU initiatives
Horst Pilger, European Commission, Belgium
EU supports the objective of making available USD 100 billion per year in climate finance to developing
countries by 2020. This includes the capitalisation of the Green Climate Fund, climate-friendly investments and
the “classical” development cooperation grants for climate actions.
In Latin America, the EU’s Development Cooperation Instrument allocates € 2.4 billion in grants to Latin
American programmes (2014 – 2020). Within the Regional Programme (€ 805M) the Multi-annual Indicative
Programme (MIP) for Latin America allocates €300M to environmental sustainability and climate change.
Regional climate change cooperation is also a clear priority in the framework of EU-CELAC relations. The
EUROCLIMA programme, adopted at the 2008 EU-CELAC Summit, supports L.A. countries with the preparation
of bankable climate finance proposals, aimed at international and national climate funds.
EUROCLIMA provides assistance through training, facilitating south-south collaboration, studies and exchange
of experiences and knowledge. For purposes of specific technical assistance, countries participate in four pilot
cases, in line with (i)NDCs prioritized sectors: agriculture, water resources, risk management and urban
transportation.
Four consultation meetings with L.A. counterparts since 2015 resulted in the identification of EUROCLIMA+, a
new regional programme that will retake EUROCLIMA lessons and successes and tackle new challenges. Given
the budget available, EUROCLIMA+ will include the funding of activities in a number of sectors considered of
key importance for environmental sustainability and climate change adaptation and/or mitigation.
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Partnership for climate finance and development: tracking climate finance for adaptation and exploring the
synergies with the Sustainable Development Goals
Gisela Campillo, Organisation for Economic Co-operation and Development (OECD), France
In 2011, a Partnership for Climate Finance and Development was launched to promote good practices and
knowledge sharing on mainstreaming climate finance into development planning and more effective ways to
use climate finance. OECD, active member of the Partnership, developed a platform to track adaptationrelated development finance managed by the Development Assistant Committee (DAC). The platform shows
that adaptation-related development finance is growing fast. 80% of mitigation finances and 61% of
adaptation finance is allocated to middle income countries. Climate finance need to target the most
vulnerable. During 2014 in L.A. countries main sectors are water and sanitation (33%), general environmental
protection (19.88%), multi sector (16.84%) and agriculture, forestry and fishing (14.36%). Energy and
transportation are mainly mitigation-funded initiatives, while water and sanitation and agriculture, forestry
and fishing are mostly adaptation oriented whereas 12% of climate funds are designated to integrated
mitigation and adaptation initiatives.
A more ambitious agenda is needed to articulate SDGs development cooperation with climate financing. More
resources are needed and more finance to flow from a wide range of sources to “leave no one behind”.
Adaptation planning and financing on the local level
Cristobal Reveco, EUROCLIMA consultant, Adapt, Chile
In order to move towards resilient cities and facilitate access to climate funds, an innovative Tool for the
development of strategic local adaptation plans to climate change was developed, as part of a partnership of
EUROCLIMA with the NGO Adapt-Chile. These instruments are applied in Academies of Climate training and
exchange sessions for technicians and local authorities. As a result, the first local plans were presented at the
COP21. This Urban planning tool has been published as a EUROCLIMA Technical Study.
Agricultural adaptation and climate finance in Latin America: The CATIE experience
Bastiaan Louman, Tropical Agricultural Research and Higher Education Centre (CATIE), Costa Rica
CATIE is actively involved in Peru, Panama and Cuba initiatives within EUROCLIMA’s Agriculture Pilot Case.
Main task is to assist national governments to prepare a proposal to apply for climate funding. Support
includes technical assistance, training, south-south cooperation and specific studies.
Peru proposal’s main objective is to improve resilience to climate change of rural populations in the most
vulnerable regions. Variety in socio-agro ecosystems requires different approaches. Moreover, access to
technical and financial assistance is more difficult in most vulnerable families. Agriculture is a priority within
Peruvian adaptation (i)NDCs. In this context EUROCLIMA through CATIE is contributing to the (i)NDC’s
implementation.
Discussion and conclusion
In the discussion (Q&A) with the panel, the role of private sector in L.A. climate funding was emphasized.
Unfortunately, there is little information about private climate finance. Private banks seldom disclose this kind
of information. Unless private sector is not mandated, investments in adaptation will not grow. Nevertheless,
in the agricultural sector there is a larger group of companies investing in adaptation. For sugar cane, banana
and coffee, climate research for adaptation innovations by private companies is substantial.
Three challenges
How to promote innovative finance opportunities, like market based mechanisms? How to decentralize
climate finance to allow better access to L.A. local governments? How to scale-up grants to loans, projects to
programmes?
Conclusion
the session discussed how to bridge the gap between available finance for climate action and the relatively
small amount of funds approved for action in the field. Latin American experiences show the gap can be
overcome by preparing human resources, providing funds to aid proposal writing, involve private sector
finance and use novel financing mechanisms. Multilateral funds should integrate more mitigation and
adaptation action to maximise resources. To reach the private sector, awareness campaigns are necessary,
always speaking their language (cost/benefit, rate of return, etc.). OECD should apply tracking methodologies
that include private sector finance.
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