However activists, academics and recipient governments all dispute the amounts contributing countries say they have given in climate finance. How much is being given? Where exactly is it going and what impact is it having? We do not know the answers to these questions, and the continuing doubt increases mistrust between donor and recipient countries, as well as governments, taxpayers in rich countries and the intended beneficiaries. This lack of trust inhibits climate finance from reaching the vulnerable people who need it most.
A number of important research reports in the past five years have tried to put a number on international climate finance flows, but have decried the lack of solid data and transparency in international climate adaptation funding due to fragmentation and lack of regulation.
The problem of clarity and transparency is bad for funding to reduce greenhouse gas emissions (mitigation finance), but it is worse for assistance in coping with climate impacts (adaptation finance). Unlike measuring tons of carbon emissions avoided, adaptation is much harder to define and measure, and there has never been a global effort to define what should count as adaptation finance.
The report explores three main questions:
1. Is provided finance genuinely categorized as adaptation finance?
2. How transparent are donor countries in their reporting of climate finance?
3. How effective is project prioritization and justification at the recipient level?
The report states that, almost a quarter of a century into climate change negotiations, we still lack an adequate system for defining, categorizing, tracking, and evaluating climate change finance.
We identified what appeared to be rampant mis-categorization of projects under the OECD Rio marker system. Many projects categorized as having adaptation as a principal or significant objective were only tenuously linked to climate change adaptation.
The assessment of developed countries’ Biennial Reports found wide variation in transparency in contributor-country reporting, illustrating the need both for greater efforts by individual countries but also for clearer and more stringent UNFCCC guidelines.
The research into the Least Developed Countries Fund and National Adaptation Programmes of Action suggests that the planning process was hampered by the complexity of the systems involved. We found that almost half of countries prioritized at least one project under their National Adaptation Programmes of Action that had no climate adaptation or vulnerability justification at all, and the study of national adaptation planning in several Latin American countries found a lack of commitment to transparency at all links in the chain.
It is evident that clear definitions and standards, as well as consistent application, review and penalties for non-compliance are fundamental to the transparency revolution needed in climate adaptation finance. The report outlines ten specific recommendations for areas of improvement within climate adaptation finance.