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CPI Updates its Global Climate Finance Figures to Inform Forthcoming UNFCCC Report

October 4, 2016

Explore the numbers at http://www.ClimateFinanceLandscape.org

London, October 4, 2016 — Today, as the fourteenth meeting of the UNFCCC’s Standing Committee on Finance takes place in Bonn, Climate Policy Initiative (CPI) releases an update to its figures for global climate finance.

The UNFCCC will publish its second Biennial Assessment and Overview of Climate Finance Flows (BA) later this month. To inform this important exercise, CPI has reviewed climate finance flows for 2013 and 2014 previously featured in our 2014 and 2015 Global Landscape of Climate Finance reports.

By analysing data from 11 additional national, bilateral and multilateral institutions and datasets released since the publication of the aforementioned Global Landscape reports, CPI identified a further USD 12 billion of climate finance in 2013 and 2014. This takes annual global climate finance to USD 392 billion and USD 342 billion in 2013 and 2014 respectively, an annual average of USD 367 billion.

The report, ‘Global Climate Finance: An Updated View on 2013 & 2014 Flows’, confirms major findings from our Global Landscapes in 2014 and 2015 and reveals new insights.

  • Overall climate finance flows decreased by 5% from 2012 to 2013 but increased by 15% in 2014 when more money than ever was spent on climate action. Total global climate finance was 9% higher in 2014 than in 2012 thanks to a steady increase in public finance and record levels of private investment in renewable energy.
  • More than 70% of climate finance tracked went to renewable energy every year from 2012 to 2014. Over the same period, technology costs per unit of renewable energy installed decreased steeply. In 2014, the same level of investment as in 2012 deployed 10 GW more solar PV and onshore wind.
  • Public adaptation finance increased by 23% from USD 22 billion in 2012 to USD 27 billion in 2013 and remained constant in 2014. On average, 52% of adaptation finance captured in 2013 and 2014 came from international sources and 48% domestically from national DFIs.
  • Private commercial finance increased from USD 22 billion in 2012 to an annual average of USD 37 billion over 2013 and 2014, reflecting mainstream commercial investors growing comfort with investing in maturing renewable energy technologies. The remarkable 78% increase from 2012 to 2014 in project-level market rate debt from public and private institutions supports this finding though is likely partly attributable to improved reporting.
  • Developing countries are overtaking developed countries to secure a larger share of global climate-relevant investment. While developed countries received around 2% more investment than developing countries in 2013 (USD 172 billion to USD 169 billion), the latter took over 11% more investment than developed countries in 2014 (USD 206 billion to USD 185 billion) and USD 29 billion more in 2012 (USD 177 billion).
  • Domestic investment made up 74% of all global climate finance tracked in 2013 and 2014, clearly predominating over international investment. An annual average of USD 136 billion in private and public finance tracked in developing countries in 2013 and 2014 was spent in the country from which it came while USD 135 billion originated and was deployed domestically in developed countries. Overall, more than 90% of all private finance we captured was invested domestically in 2013 and 2014.
  • Despite the low proportion of overall finance that flows internationally, international finance is increasing. International finance grew by 14% from 2014 to 2012, due to increased support from several international institutions for climate activities. In 2013 and 2014, we estimate that USD 41 billion on average flowed annually from developed to developing countries.

CPI also contributed analysis to the 2016 New Climate Economy Report on ‘The Sustainable Infrastructure Imperative: Financing for Better Growth and Development’ to be published later this week. As ever, its experts remain available for comment on financing for low-carbon and climate-resilient forms of energy and land use.

Quote

“More money than ever has been spent on climate finance. However, to move towards a below two degrees pathway, investments need to scale up significantly,” said Dr. Barbara Buchner, Executive Director, Climate Finance of Climate Policy Initiative. “By strengthening policy frameworks and identifying and fast-tracking financial instruments, governments and their partners can attract increased investment into renewable energy, energy efficiency, sustainable transport, and climate resilience and further mainstream green resilient growth.”