AR5: Mitigation of Climate Change - Chapters - Chapter 15

Chapter 15: National and Sub-national Policies and Institutions

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15.12 Investment and finance

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15.12.2 Policy change direction for finance and investments in developing countries

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There have been some significant trends in recent years regarding climate finance and the actors involved. Three are particularly relevant for their impact on the way climate finance is being managed and who does the management. First, financing climate objectives by mainstreaming climate change into development planning has been gaining ground. This is particularly the case of countries wanting to integrate adaptation strategies into their overall national strategy as a way to build resilience. It is also evident in some of the climate change action plans and strategies of some countries that are clearly linked to poverty reduction and national development objectives (Garibaldi et al., 2013). However, the benefits and costs of integrating climate change considerations into development planning may be difficult to attain in practice. The OECD (OECD, 2005) warns of ‘mainstreaming overload’ as climate change competes with other issues like governance and gender to be mainstreamed into development planning. Barriers to integrating climate and development objectives include: lack of human and institutional capacity and lack of coordination among line ministries (Knack and Rahman, 2007; Kok et al., 2008).