Closing the Finance Gap for Developing Economy Climate Needs

This Capstone project supplements the Climate Policy Initiative’s Global Landscape of Climate Finance (GLCF) from 2021. For this project, the team analyzed whether financing flows tracked in the GLCF and elsewhere have corresponded to stated climate finance needs. Stated climate needs were sourced from national policy documents, such as nationally determined contributions (NDCs) and long-term strategies, as well as independent policy analysis reports. Based on this analysis, the project considered the extent to which global climate finance is being directed towards underserved markets and otherwise holds potential for transformative change outside of business as usual. These questions were explored through country case studies on Colombia and Morocco, which were selected based on a series of filtering criteria, including granularity of national climate commitments, institutional capacity, and team access to country experts. The project incorporated these case studies into a report which included a needs gap assessment between national/sectoral climate finance needs and flows and an examination of how specific mitigation and adaptation projects have been previously financed. These project-level evaluations were utilized to granularly identify factors that support transformative impact and additionality. In summary, the project provided a new lens through which the data in the GLCF can be understood and a framework for how to measure the impacts of climate finance flows and initiatives in developing economies.