CLIMATE FINANCE
STATE OF PLAY
Tokyo Japan, 04 August 2016
ATHENA BALLESTEROS, GLOBAL DIRECTOR, SUSTAINABLE FINANCE CENTER, WORLD RESOURCES INSTITUTEOUTLINE• Introduction: what is climate finance• Current climate finance flows (Japan’s role)• Post Paris messages• Transformational climate finance• Role of the Green Climate Fund
• Japan and coal finance• Conclusion

CLIMATE FINANCEFLOWSUNFCCC Standing Committee on Finance (2014) Biennial Assessment and Overview of Climate
Finance Flows
http://unfccc.int/cooperation_and_support/financial_mechanism/standing_committee/items/8034.phpFLOWS OF CLIMATE FINANCE

Climate Policy Initiative, 2014

…COMPARED TO INVESTMENT NEEDSWorld Economic Forum (2013) The Green Investment ReportBillion USD

REPORTED CLIMATE FINANCE BY ANNEX IICONTRIBUTOR, 2011-2014$30$25
NorwayUnited Kingdom$20

United States

Germany$15
France$10European Union

$5
Japan

$02011

2012

Contributor self-reported data from UNFCCC (2016) Submitted Biennial Reports
http://unfccc.int/national_reports/biennial_reports_and_iar/submitted_biennial_reports/ite
ms/7550.php

20132014

Billion USD

THEMATIC BREAKDOWN OF REPORTED CLIMATEFINANCE BY ANNEX II CONTRIBUTORS
$30

$0.9

$0.8

$25

$4.4

$4.2
$20
$0.8

$0.7

$3.3

$3.2

$3.7

$4.7

$15
$2.6

$3.3
$10

$17.3

$16.0
$5

$11.4

$12.3

2011

2012

$0Mitigation

Adaptation

Contributor self-reported data from UNFCCC (2016) Submitted Biennial Reports
http://unfccc.int/national_reports/biennial_reports_and_iar/submitted_biennial_reports/ite
ms/7550.php

2013

Cross-cutting

2014

Other

WHAT COUNTS?
Additionality definitions

Option 1

Funding above the 0.7
per cent ODA target

Option 2

Increase in current
levels of climatefinance (referenceyear: 2009)

Option 3

Funding additional to
the level of ODA
spending in nominalterms

Option 4

Increase in climate
finance from newsources

Adapted from Knoke and Duwe (2012)

CPI, ODI & WRI (2015) What Counts? http://www.wri.org/publication/what-counts-toolshelp-define-and-understand-progress-towards-100-billion-climate; UNCTAD (2015) “Newand Additional” Climate Finance: A Continuing Lack of Clarity
http://unctad.org/en/PublicationsLibrary/presspb2015d15_en.pdf

REPORTED CLIMATE FINANCE BY ANNEX IICONTRIBUTOR AND THEME, 2014
Australia
Austria
BelgiumCanadaDenmark
FinlandFranceGermany
GreeceIceland
Ireland
Italy
Japan
Luxembourg
Netherlands
New Zealand
NorwayPortugal
Spain
SwedenSwitzerland
United Kingdom
United States
European Union

Mitigation
Adaptation
Cross-cutting

Other$0$1$2$3$4

Source: Contributor self-reported data from UNFCCC (2016) Submitted Biennial Reports
http://unfccc.int/national_reports/biennial_reports_and_iar/submitted_biennial_reports/ite
ms/7550.php$5$6$7$8
Billion USD

ANNEX II CONTRIBUTORS 2020 ANNOUNCED
CLIMATE FINANCE
Australia
Austria
Belgium
CanadaDenmark
FinlandFranceGermany
GreeceIcelandIreland
ItalyJapan
Luxembourg
Netherlands
New Zealand
NorwayPortugal
SpainSweden
Switzerland
United Kingdom
United States
European Union

No 2020 announcement yet
Announcement up to 2019, assume same level in 2020

No 2020 announcement yet

Announcement of ¥1,300bn ($10.8bn) includes both public and private finance
No 2020 announcement yet
Announcement up to 2019, assume same level in 2020

No 2020 announcement yet
No 2020 announcement yet
No 2020 announcement yet
2020 announcement covered adaptation finance only

$0$1$2$3

Source: Calculated based on UNFCCC (2015) List of Recent Climate FundingAnnouncements. http://newsroom.unfccc.int/financial-flows/list-of-recent-climate-fundingannouncements/$4$5$6$7$8
Billion USD

Billion USD

MDB REPORTED CLIMATE FINANCE, 2014
$16

40%

$14

35%

$12

30%

$10

25%

$8

20%
$6.1

$6$4

15%
10%

$5.1

$2

$3.9

$2.1
$1.2

$0

$0.7

$0.8

ADB

AfDB

Adaptation

$2.4

$2.5

$0.2

$0.1

$0.1

$0.0

EBRD

EIB

IDB

IFC

Mitigation

$3.1

5%
0%

WB

Climate finance as proportion of total MDB finance
NB: Not adjusted for developed country attributed shareWorld Bank (2015) 2014 joint report on Multilateral Development Banks' climate finance.
http://documents.worldbank.org/curated/en/2015/06/24641149/2014-joint-reportmultilateral-development-banks-climate-financeBillion USD

MDB 2020 ANNOUNCED CLIMATE FINANCE
$16

40%

$14

35%

$12

30%

$10

25%

$8

$16

20%

$6

15%

$4

10%
$6$6$2

$5

$5

5%

$4

$00%
AfDB

ADB

EBRD

EIBIDB

WBG

Pledged amount (dotted bars indicate estimated value based on percentage commitment)
Climate finance as a proportion of total MDB finance (if available)
NB: Not adjusted for developed country attributed share
Calculated based on UNFCCC (2015) List of Recent Climate Funding Announcements.
http://newsroom.unfccc.int/financial-flows/list-of-recent-climate-funding-announcements/

FUTURE TRENDS
COP 21 decision 1/CP.21:• Developed countries strongly urged to “scale up their level of financial
support, with a concrete road map” to achieve $100bn goal;• “Significantly increasing adaptation finance from current levels”;• Developed countries “intend to continue their existing collectivemobilization goal through 2025”;• Prior to 2025, “the meeting of the Parties to the Paris Agreement shallset a new collective quantified goal from a floor of USD 100 billion”.
Paris Agreement, Article 9.4:
“The provision of scaled-up financial resources should aim to achieve abalance between adaptation and mitigation, taking into account countrydriven strategies, and the priorities and needs of developing country
Parties, especially those that are particularly vulnerable to the adverse
effects of climate change and have significant capacity constraints, such as
the least developed countries and small island developing States,considering the need for public and grant-based resources for adaptation.”(Emphases added)

UNFCCC (2015) Decision 1/CP.21: Adoption of the Paris Agreement
http://unfccc.int/resource/docs/2015/cop21/eng/10a01.pdf

POTENTIAL PATHWAYS TO $100 BILLION

http://www.wri.org/blog/2015/10/insider-getting-100-billion-climate-finance-how-close-are-weWRI (2015) INSIDER: Getting to $100 Billion in Climate Finance: How Close Are We?
http://www.wri.org/publication/getting-100-billion-climate-finance-scenarios-andprojections-2020

Flag Heading

GCF Readiness Programme

SIGNS OF A GLOBAL TRANSFORMATION?

Source: REN21 (2015) “Renewables 2015 Global Status Report.” Paris, France: REN21
Secretariat. Online at: http://www.ren21.net/wp-content/uploads/2015/06/REN12GSR2015_Onlinebook_low1.pdf.

20 LOW-CARBON ENERGY CASES REVIEWED

Source: Westphal and Thwaites (2016) “Transformational Climate Finance: An
Exploration of Low- Carbon Energy.” Washington, DC: World Resources Institute.
Available online at http://www.wri.org/ publication/transformational-climate-finance.

KEY FACTORS FOR TRANSFORMATIONAL CHANGE
IN LOW-CARBON ENERGY

Source: Westphal and Thwaites (2016) “Transformational Climate Finance: An
Exploration of Low- Carbon Energy.” Washington, DC: World Resources Institute.
Available online at http://www.wri.org/ publication/transformational-climate-finance.

THE RELATIONSHIP BETWEEN FOSSIL-FUELSUBSIDIES AND EMISSIONS INTENSITY IN 178
COUNTRIES

Notes: Authors’ statistical regression. The post-tax fossil-fuel subsidy data are for 2011,,
the emissions intensity data are for 2010. Sources: IMF (2013) “Energy Subsidy Reform:
Lessons and Implications.” and World Bank (2014) “World Bank Open Data.”

TOP FUNDERS OF ASIA PUBLIC COAL FINANCE
2007-2014 (BILLION USD)

$1$1$3$5$7

JBIC•KEXIM•CDBADB
CHEXIM
WBG
BOC
JICA

•

NEXI
K-SureICBC
SinosureMultilateral
Japan

China
Korea

Source: Natural Resources Defense Council, Oil Change International, World Wide Fund for Nature,
2015

China, Japan and Korea are top
funding countries in Asia;
Most funders from these three
countries are national
development banks, exportimport agencies, or state-owned
commercial banks;
World Bank Group and AsianDevelopment Bank are the twomain multilateral funders for Asia
coal financing.

JAPAN
Coal Plants Status
Installed Capacity (MW)Top Developers
Installed Capacity (MW)
01000 2000 3000 4000 5000 6000

25,000Kansai Electric Power20,000

J-Power
15,000Tokyo Gas

10,000Kyushu Electric Power

5,000

Tokyo Electric Power0Operating

Source: Coalswarm, Global Coal Plant Tracker, 2015

Construction

Source: Coalswarm, Global Coal Plant Tracker, 2015

PlannedCancelled

JAPAN – OVERSEAS COAL FINANCE
Billions

Top Destinations
2007 – 2014 (billion USD)

Major Funders
2007 – 2014 (billion USD)

$4$8$4

Billions
$0$3
JBIC

$2
JICA
$1

NEXI
$0
Philippines

VietnamIndonesia

India

Source: Natural Resources Defense Council, Oil Change International, World Wide Fund for Nature, 2016

HOW DO WE ENABLE THE SHIFT TO
TRANSFORMATIONAL CLIMATE FINANCE?
PUBLIC TOOLS TO ATTRACT PRIVATE SECTORINVESTMENT

Source: Venugopal and Srivastava (2012) “Moving the Fulcrum: A Primer on Public
Climate Financing Instruments Used to Leverage Private Capital.” Washington, D.C.:
World Resources Institute.

PLANNING FRAMEWORK FOR TRANSFORMATIONAL
CLIMATE FINANCE FOR RECIPIENT COUNTRIES

Westphal and Thwaites (2016) “Transformational Climate Finance: An Exploration ofLow- Carbon Energy.” Washington, DC: World Resources Institute. Available online at
http://www.wri.org/ publication/transformational-climate-finance.

THANK YOU!

aballesteros@wri.org