Martin Stadelmann

Difficulties in accounting for private finance in international climate policy

It is widely acknowledged that private finance has a key role to play in achieving low-carbon development and resilience to climate change. However, while there have been several studies that have closely examined the data on public climate finance, there have been few such studies of the private climate-related finance data. There is a political dimension to accounting for ‘private finance’ given the commitment of industrialized countries – enshrined in the Copenhagen Accord and the Cancun Agreements – to mobilize US

Equity and cost-effectiveness of multilateral adaptation finance: are they friends or foes?

100 billion of public and private finance for developing countries by 2020, on an annual basis. The availability and quality of data for different types of private climate finance flows with climate benefits (investments, carbon market payments, and voluntary funding) are analysed, and these flows are assessed according to various criteria for inclusion in the

Climate change mitigation and international finance: the effectiveness of the Clean Development Mechanism and the Global Environment Facility in India and Brazil

100 billion figure. While existing data suggest that private climate finance invested in developing countries and mobilized by industrialized countries might currently be in the range of

Answer of the authors to the response of the Adaptation Fund Board Secretariat to the article

27–123 billion per year, this number is a questionable point of reference. Existing data are limited and of very poor quality: definitions of ‘private climate finance’ are missing and data are hardly verified. Therefore, policy makers will first have to clearly define ‘private climate finance’ and develop systems for measuring, reporting, and verifying it, before using private finance numbers in international climate agreements.

Answer of the authors to the response of the Adaptation Fund Board Secretariat to the article: ‘Equity and cost-effectiveness of multilateral adaptation finance: Are they friends or foes?’ in International Environmental Agreements: Politics, Law and Economics—Stadelmann et al. (2014).

This paper analyzes potential criteria to allocate international funding for adaptation to climate change, as a response to one of the main governance challenges of international adaptation funding—the prioritization of project proposals given scarce funding. Based on the review of the equity and cost-effectiveness literature and relevant policy documents, we identify three potential indicators for equity (vulnerability level, poverty, equal funding per capita), and three indicators for cost-effectiveness (economic savings in absolute and relative terms, human lives saved). Applying these simple indicators to information provided in all 39 project documents considered by the Adaptation Fund Board (AFB) in 2011, we find that projects approved or endorsed by the AFB rank high according to one cost-effectiveness indicator (absolute economic savings), while they rather rank low according to all equity and further cost-effectiveness indicators. Furthermore, we analyze whether equity and cost-effectiveness are two contradicting goals, or whether ways can be found to reconcile both goals in multilateral adaptation finance. We conclude from both the theory and the 39 analyzed project documents that a pure economic definition of cost-effectiveness tends to be in contradiction with equity but that trade-offs between equity and cost-effectiveness can be limited if relative economic savings or human live savings are used as indicator for cost-effectiveness.

Answer of the authors to the response of the Adaptation Fund Board Secretariat to the article ‘Equity and cost-effectiveness of multilateral adaptation finance: are they friends or foes?’

This study analyzes the effectiveness and efficiency of the two principal United Nations (UN) climate change mitigation finance mechanisms, the Clean Development Mechanism (CDM) and the Global Environment Facility (GEF). The realised abatement and costs of the two mechanisms in India and Brazil (using data from 28 GEF and 233 CDM project documents) are compared with theoretical marginal abatement cost curves, based on bottom-up technology studies. We find that both mechanisms have focused on negative and low-cost abatement potential but still leave substantial theoretical potential in this cost range untapped. CDM has more effectively harvested abatement potential of industrial gases and methane emissions, whereas GEF has more successfully targeted demand-side energy efficiency (EE) and transport emission reduction opportunities. CDM has excelled at capturing abatement potential in areas with a limited understanding of abatement, highlighting the shortcomings of theoretical estimates (such as Marginal Abatement Cost Curves) and the benefits of a market mechanism. In some sectors and technologies (particularly renewable energy), the two mechanisms overlapped, which suggests a need for better coordination in the future.

Acting on Climate Finance Pledges: Inter-Agency Dynamics and Relationships with Aid in Contributor States

Answer of the authors to the response of the Adaptation Fund Board Secretariat to the article ‘Equity and cost-effectiveness of multilateral adaptation finance: are they friends or foes?’

New and additional to what? Assessing options for baselines to assess climate finance pledges

Answer of the authors to the response of the Adaptation Fund Board Secretariat to the article ‘Equity and cost-effectiveness of multilateral adaptation finance: are they friends or foes?’

Climate policy innovation in the South – Domestic and international determinants of renewable energy policies in developing and emerging countries

Answer of the authors to the response of the Adaptation Fund Board Secretariat to the article ‘Equity and cost-effectiveness of multilateral adaptation finance: are they friends or foes?’