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Climate Change Development Policy Operations and the Green Climate Fund

Working Papers N°04/2013. Iddri, 2013. 24 p.

Un article consacré à l’aide budgétaire climat, instrument de soutien financier, technique et politique à la mise en œuvre de stratégies de développement décarboné et de politiques climatiques. Les difficultés liées à la quantification de l’impact de l’aide budgétaire ne devraient pas remettre en cause son utilisation. Elle devrait donc faire partie du portefeuille du Fonds vert pour le climat.

Points clés [en anglais] :

  • CLIMATE BUDGET SUPPORT: AN INNOVATIVE AND PROMISING INSTRUMENT

Climate budget aid is an instrument providing financial, technical and political support for implementing low-carbon development strategies and climate policies. In return for a donor-funded sovereign loan, recipient countries commit to rolling out economic and institutional reforms and policies and measures that will mitigate their emission reductions as well as their vulnerability to climate change impacts. Climate budget aid is particularly well-tailored to the crosscutting nature of low-carbon development strategies and the cross-sectoral aspect of climate policies.

  • QUESTIONS RELATED TO ASSESSING ITS IMPACT AND RESULTS

The purpose of climate budget aid is to strengthen, clarify and supplement the recipient countries’ low-carbon development strategies in the medium run—often as far as 2020. The instrument prioritises the institutional aspect of their implementation, which means that, by definition, it is not possible to measure the additional emission reductions attributable to the impact of budget aid—which is disbursed over three years—once this has come to an end. On the other hand, it is possible to precisely identify the results and—in some cases—quantify them using indicators included in the matrix used to monitor the action programme.

  • A CRUCIAL INSTRUMENT FOR THE GREEN CLIMATE FUND PORTFOLIO

The difficulties of quantifying the impact of budget aid should not call its use into question. These are part and parcel of all large-scale support programmes that target a transformational goal. Budget aid usefully supplements project funding and support for investment, as it integrates them into an overarching strategy and helps improve their cost-effectiveness. It therefore well deserves a place in the Green Climate Fund portfolio.