The Importance of Equitable and Fair Access to Climate Finance as a Theme at COP26

Introduction

Local communities in the global south face the greatest impacts of climate change. They provide climate solutions based on their local knowledge, yet they remain unable to access climate finance funds or have any say in how the money is spent.

The Government of Ecuador as host, together with Helvetas Swiss Intercooperation, Fundación Avina, Voices for Just Climate Action (VCA) alliance, the civil association TEMNYA21 and the regional project Andes Resilientes al Cambio Climático, came together to organize a side event within the United Nations Climate Change Conference 2021 framework – COP26 – to discuss how the financing of local solutions can better respond to the local needs.

An infographic on the event “Financing local solutions as a means to climate justice that leaves no one behind” can be downloaded from the right-hand column

Speakers

This side event held on November 4 sought to raise awareness about the global need to find better ways to bring financial resources closer to communities that have developed climate solutions based on their needs. Rewatch the event here. Below we provide a summary.

Welcome

The event began with a welcome by Ecuador’s Minister of Environment, Water and Ecological Transition, Gustavo Manrique, who also participated in the panel; as well as opening remarks by Rosa Morales, General Director of Climate Change and Desertification of the Ministry of the Environment of Peru.

Anju Sharma

Anju Sharma, lead on Local Action at the Global Centre on Adaptation, gave a scene-setting presentation for the session.

Anju gave an example from Odisha, India, about the financing challenges faced by communities. Forests are dryer – fires happen earlier and more frequently, and as a result livelihoods may be destroyed – as occurred in last year’s fires. Since the communities have no economic assets and can not borrow, just one such event can set back development gains in all aspects energy, health, education if the communities don’t receive timely help. Local government usually can’t help because they have no unallocated funding. National government budgets also are under heavy financial strain, partly because of costs of climate change. There is sometimes external funding, but government has limited capacity to access this even at the national level because of complicated access modalities for funding. They rely on the work of external consultants but frequently there is shift in focus to national rather than local level activities.

Other drawbacks of money from international sources are that it does not work well with national budgets – it needs to be used in different ways. As a result there is very little local or even national determination of funding. Bilateral and multilateral institutions need to become more coherent in funding, and make it easier to access. Local communities cannot access funds because of prolongued access modality – it takes time to deal with – too late to provide help. There is some improvement now with the provision of ‘direct access’ funding with the Adaptation Fund and likewise with the Green Climate Fund. These are providing lessons – suggesting this is working for national governments – as is making development assistance part of national budgets (for example the OECD published a report on this). Now we have to make it easier for local governments and communities.

We should focus on making access simpler so that it works for communities, on flexibility for communities to decide what the money is used for. Funders should be accountable to the communities, rather than the other way around where accountability is through very complex M&E systems.

In her presentation, Anju left us various reflections, as captured in the following Helvetas tweets:

The event was facilitated by Andrés Mogro, climate policy specialist and coordinator in Ecuador for the Andes Resilientes project. If you want to know more about the proposed topic, you can download an infographic with key points here, and a more detailed analysis in this paper prepared by Hivos.

• Bianka Kretchmer, Climate Change Analyst at the Adaptation Fund:

Bianka discussed the Adaptation Fund’s work on channelling funding to the local level and reflected on barriers including the high transaction costs on funding small projects and difficulty to incentivise, but noted also some improvements in fund design: direct access modality, more local input into decision-making about how funds should be spent. Main success factors with such projects include the involvement of CBOs that have been working a long time in the area and the introduction of improved criteria on projects that are approved for funding.

The event was facilitated by Andrés Mogro, climate policy specialist and coordinator in Ecuador for the Andes Resilientes project. If you want to know more about the proposed topic, you can download an infographic with key points here, and a more detailed analysis in this paper prepared by Hivos.