Selecting effective financial instruments to support action on climate change
This low emission development strategies (LEDS) Finance Resource Guide presents a curated selection of resources on a range of topics around finance for LEDS and Nationally Determined Contributions (NDCs). It is designed to help LEDS practitioners find high-quality resources that meet their specific needs, avoiding time-consuming searches on the internet. It will be useful to individuals working on, or interested in, LEDS and NDC finance in both developed and developing countries.
- 1. Understanding the situation
- 1.1 Understanding current flows
- 1.2 Assessing financing needs
- 1.3 Assessing capacity
- 1.4 Identifying and overcoming barriers
- 2. Planning and coordinating
- 2.1 Institutions and governance
- 2.2 National finance strategies
- 2.3 Investment plans
- 2.4 National climate funds
- 2.5 Green investment banks
- 4. Using public finance
- 4.1 Managing national finance
- 4.2 International climate finance
- 4.3 Climate finance readiness
- 4.4 The Green Climate Fund
- 4.5 Direct access
- 5. Designing financial instruments
- 5.1 General resources
- 5.2 Sources of private finance
- 5.3 Risk mitigation
- 5.4 Guarantees
- 5.5 Feed-in tariffs and auctions
- 5.6 Taxes and tax incentives
- 5.7 Carbon pricing
4.3 Climate finance readiness
Climate finance readiness reflects a country’s capacity to plan for, access, and deliver climate finance, as well as to monitor and report on expenditures. It is widely recognized that direct access to, for example, the Green Climate Fund will require a level of capacity by governments and other actors involved to prepare national mechanisms to access, allocate, disburse, and report on climate finance. These mechanisms must be compatible not only with Fund’s requirements, but also with the country’s planning, budgeting, programming, and monitoring procedures and systems. In other words, developing countries will need to get ready for Green Climate Fund and other climate financing. This section presents some resources to help countries think about how to assess and improve their level of climate finance readiness. (Adapted from GCF Readiness Programme, UN Environment/UNDP/WRI.)
This brief outlines GIZ’s approach to provision of support in the field of climate finance. It describes the services GIZ offers under each of five modules, and explains why each module is important. The modules are: strategic planning and developing policies; strengthening institutions and good financial governance; accessing international climate finance; effective and transparent spending and implementation; and promoting private sector engagement.
Readiness for climate finance: A framework for understanding what it means to be ready to use climate finance
The paper presents a framework for understanding what it means to be ‘ready’ to use climate finance in a transformative way at the national level. It identifies four main capacities that countries need: capacity to plan for finance; capacity to access finance; capacity to deliver finance; and capacity to monitor, report, and verify finance. The paper provides a useful framework for countries to consider their own national capacity regarding LEDS finance. The intended audience is policymakers at both international and national levels in developing countries.
This report identifies opportunities for India to strengthen its ability to effectively access and deliver increasingly large volumes of international climate finance. It examines the climate finance landscape, India’s experience in accessing climate finance, national policies to address climate change, and the effectiveness of India’s institutional management of climate change. The report uses a climate finance readiness framework that analyses these main topics to assess the strengths, barriers, and gaps in India’s ability to access international climate finance.