Item talk:Q1367
Rationale
Public finance actors are critical for climate finance as they can help address investment gaps in areas where private finance is lacking, such as Agriculture, Forestry and Other Land Use (AFOLU). They are essential in supporting adaptation efforts, providing the bulk of flows (92% in 2022) for water and wastewater, AFOLU and cross-sectoral projects. Some public finance actors can de-risk investments by attracting private investors through guarantees and risk mitigation. Increasing concessional finance from international public finance actors can prevent debt vulnerabilities in emerging markets and developing economies (EMDEs) and least developed countries (LDCs). They can also mobilise domestic resources by building enabling environments. Public finance is key to redirecting fossil fuel expenditures toward low-carbon, resilient development. Moreover, public finance from Global South countries supports South-South cooperation, scaling climate finance and ensuring resources are used effectively to meet global climate targets.
Concept methodology
Climate Policy Initiative's (CPI's) Global Landscape of Climate Finance 2023 [1] and its methodology document [2] provided an analytical structure with which to disaggregate the adjacent concept of climate finance into the following elements:
- Sources and intermediaries
- Instruments
- Uses
- Sectors
CPI's sources and intermediaries are partially represented by this concept, and by the climate finance subconcept of climate fund. This concept is separated from climate finance due to the diverse purposes of public finance actors, whereas a climate fund is exclusively concerned with climate finance. The scope of this element is largely narrowed to focus on international flows of public finance.
The Wikipedia data below was used to populate this concept's subconcepts, and these were further refined on the basis of internal expertise:
- Wikipedia’s list of Export Credit Agencies [3]
- Wikipedia’s list of central banks [4]
- Wikipedia’s list of government-owned companies [5]
References & acknowledgements
We are grateful for the expertise and contributions of Baysa Naran and Nikita Marini at CPI. We also acknowledge the building blocks of our taxonomy, namely the extensive research and work of CPI and Wikipedia in enhancing our understanding of climate finance.
[1] Climate Policy Initiative. (2023). Global Landscape of Climate Finance 2023. Retrieved from https://www.climatepolicyinitiative.org/publication/global-landscape-of-climate-finance-2023/
[2] Climate Policy Initiative. (2023). Global Landscape of Climate Finance 2023 Methodology. Retrieved from https://www.climatepolicyinitiative.org/publication/global-landscape-of-climate-finance-2023/
[4] https://en.wikipedia.org/wiki/List_of_central_banks
[5] https://en.wikipedia.org/wiki/List_of_government-owned_companies