Less than 10 per cent of money committed under international climate funds to help developing countries take action on climate change is directed at the local level, according to a new finding by the UNFCCC Standing Committee on Finance.
The report shows that less than 10 percent of the USD 17 billion that has been allocated from the international climate fund by 2016 has trickled down to local levels and it is vital that the imbalance is addressed so the finances can flow to all levels-national, regional and local.
The findings show that more focus needs to be given on bettering the current inadequate systems and failure to recognize the importance of climate financing at the local level means it will be significantly harder for developing countries to meet the UN’s Sustainable Development Goals and implement the Paris Agreement.
Some of the issues that stand in the way of finances reaching local levels include multilateral development banks and UN agencies being less able to finance small-scale projects directly due to higher transaction costs.
The findings also show that concerns over the ability to manage large amounts of finance while failing to provide support for skills development and building the capacities of institutions on the ground are also leading to the vast majority of climate finance becoming channelled to national and regional programs.
According to Andrew Norton, Director of the International Institute for Environment and Development, reforms need to be made on how financing bodies and UN agencies distribute climate finance.
“To be effective in helping poor communities build resilience and tackle the effects of climate change, many more climate funds need to reach the local level. International meetings on climate must help address this imbalance and make sure more money from international climate funds is effectively directed to the local level,” he said speaking at the meeting of the UNFCCC Standing Committee on Finance in Bonn, Germany on March 7, 2017.
Despite the Paris Agreement and the Addis Ababa Action Agenda no international target has been established. Changing this and establishing goals and a minimum level of finance are some of the suggestions made at the meeting.