The UN system, including the Bretton Woods Institutions, is assisting developing countries in better leveraging finance from a variety of sources to help them adapt to climate change impacts and undertake nationally appropriate mitigation actions in the context of sustainable development.
Developing countries require substantial financial assistance for adaptation, technology cooperation and mitigation. Arrangements under the Convention and its Kyoto Protocol need to be fully implemented and additional funds made available to support climate change actions in the context of each countryís sustainable development process, especially in connection to adaptation to climate change.
The emerging and yet incomplete cost estimates of additional investments needed in developing countries — by public and private sources — are in the order of hundreds of billions of dollar a year for several decades. Addressing climate change will require significant changes in patterns of investment and financial flows including by redirecting investments and financial flows from all sources to more sustainable climate-friendly alternatives; scalingup of international private and public finance dedicated to investment in mitigation or adaptation activities or technologies; optimizing the allocation of the funds available by spreading the risk across private and public investors.
It is crucial to simplify access to the diversity of international funding sources, vertical funds, and investment opportunities, which pose a heavy burden on developing countries that are seeking to enhance national development through international financing. The UN system, including the Bretton Woods Institutions, is already assisting developing countries in better leveraging finance from a variety of sources and making their regulatory and investment environment more conducive to climate-friendly investment. Moreover, the UN system has an important role to play in supporting and enabling developing countries to participate in the carbon market and benefit from its enormous potential as well as prepare for future funding opportunities to catalyze climate action.
The UN is currently taking action in a number of critical areas to support finance to address climate change, including:
Development of a voluntary global financial mechanism/portfolio approach/forest financing framework for all types of forests to support the implementation of the Non-Legally Binding Instrument on All Types of Forests and the achievement of the Global objectives on Forests.
Facilitating finance sector engagement in climate mitigation by building financier capacity and awareness, lowering the costs and barriers of initial transactions, and supporting the development of new financial products that accelerate adoption of climate technologies and markets.