This Issue Brief examines the role of the G20 and related institutions in driving the mainstreaming of climate change into international public finance.
This could be done through: a facilitative work, as G20 is well positioned to transform the overarching objective of the Paris Agreement and the SDGs into political momentum as well as guiding principles to facilitate International Financial Institutions (IFIs) to implement these objectives; promoting experience sharing, as G20 should serve as a platform for IFIs; and improving transparency, as G20 can help data gathering and reporting exercise from relevant IFIs.
KEY MESSAGES:
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Public climate finance can provide a crucial complement to the necessary, economy-wide shift of investments required for the transition to low-carbon, climate-resilient societies. Developed countries have notably an important obligation under the Paris Agreement to continue to provide climate finance. However, the landscape of international public finance is growing more diverse. New international financial institutions are emerging, promoting important flows of South-South funding.
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There is thus a need for a new set of principles reflecting this trend and the objectives of the Paris Agreement and the Sustainable Development Goals. Notably, public financial flows should contribute to the objectives of both agreements; should be based on nationally determined contributions (NDCs) and long-term low emissions development strategies (LT-LEDS); and should take care not to divert funding from traditional development objectives like education, health, poverty reduction, good governance, etc.
- The G20 can play a role in promoting principles of mainstreaming climate finance into international financial institutions, thanks notably to its financial expertise, policy weight, and geographic coverage. The G20 could further articulate its role in this regard, and continuously improve experience sharing and transparency of different international financial institutions’ data and policies.
