Climate finance has emerged as a key issue ahead of December's Paris climate meeting. What are the main barriers that stand in the way to scaling up financing? During today's OnPoint, Barbara Buchner, senior director of the Climate Policy Initiative and the head of the secretariat for the Global Innovation Lab for Climate Finance, discusses the lab's work to find innovative approaches to spurring public- and private-sector financing for climate change adaptation.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Barbara Buchner, senior director of the Climate Policy Initiative and the head of the secretariat for the Global Innovation Lab for Climate Finance. Barbara, it's great to have you here.
Barbara Buchner: Thanks so much. I'm very happy to be here.
Monica Trauzzi: Thank you. Barbara, climate finance has emerged as a key issue heading towards December's Paris climate meeting. What are the main barriers that stand in the way of scaling up finance?
Barbara Buchner: Yeah. As you say, I think climate finance actually is -- nations are working towards kind of finding an agreement on how to address climate change. Access to funding actually has emerged as one of the critical issues in actually making progress happen, and I think one of the main issues is really understanding how we can get the trillions that we need in order to get our world on a low-carbon climate-resilient pathway. And this is one of the issues where we really need to understand how all different types of actors from both the public and private sectors can work together in order to make this happen.
Monica Trauzzi: And so the Global Innovation Lab for Climate Finance was developed in 2014 by the U.S. State Department as well as a few other governments -- U.K., Germany -- to establish possible mechanisms and paths forward on finance. What's the progress you've made and what's the message you think needs to be delivered in Paris?
Barbara Buchner: Yes, so I think the Global Innovation Lab really is an innovative mechanism. Again, it was driven by the U.S., together with a couple of other donor governments, and I think that the big new approach that was provided by the lab is really bringing together public and private actors, but in order to really stress this new kind of cutting-edge climate finance instruments, we need to scale up finance, and that's the issue. What we have done in kind of less than a year of operation of the lab is actually develop four very innovative climate finance instruments. We've helped raise nearly $200 million of U.S. dollars of initial seed funding and have a couple of the four instruments already in piloting stage, and showed really that we can move from thought to action very quickly, of course, being endorsed by the G-7, which shows that this is an initiative that really can help governments spend their money wisely.
Monica Trauzzi: And now the program is launching a new cycle, which essentially is a call for submissions of ideas to increase finance. What are you looking for?
Barbara Buchner: Again, the lab's innovative features is really based on this crowdsourcing of ideas. I think they manage to develop all this, you know, new ideas in the first cycle because we managed to have this very open co-ideas from a wide range of stakeholders in both developed, developing countries in the first cycle of more than 90 submissions, and we really look forward now to getting new ideas. We know that there's a lot out there and we know that there's a lot of innovative thinking, so what we're looking for is for instruments that can scale up the climate finance, both in mitigation and adaptation. Adaptation particularly, we know that there is a need for more innovative thinking to bring the private sector in. Again, the overall goal of the lab is really to drive and catalyze private investments in emerging economies and using public money most effectively. So we're really looking for innovative ideas. They can be catalytic, they can be actionable, so kind of implemented in a short time of -- period of time, and can really be innovative in the sense that it kind of applies new thinking to how we can get to the trillions.
Monica Trauzzi: Bloomberg Philanthropies has called for ideas to scale up private climate finance specifically. What needs to be established in Paris so that the private sector has enough certainty and sort of has the right framework in place to plug their money into?
Barbara Buchner: Yeah, that's a very good question because what we've seen and what we know is that the public sector has a crucial role in able to set enabling frameworks and the enabling environments for the private sector to come in. In our work, we've shown that about three-quarters of all global investments in climate change are domestic, which means that they're originating in the same country in which they're made. And that shows that the private sector is looking for environments that are perceived to be less risky and, you know, but they really feel that they have the certainty to act in these countries. So what we need in order to fill the gap and get us on a low-carbon, climate-resilient pathway is to set the right domestic policy frameworks and really to make sure that the private sector is ready to come in.
Monica Trauzzi: And developed countries have set this commitment of $100 billion by 2020 to give aid to developing countries on adaptation. Are you confident that they'll meet that goal?
Barbara Buchner: Well, actually, just a week ago, the ... asked the CPI we have published a report that showed progress on where we are compared to the $100 billion commitment that developed countries have made, and the picture's actually encouraging. What we see is that we are at about $62 billion USD, and we still have, like, five years to go until that commitments need to be met, in a sense. So we do think that the picture's encouraging, but again, what I want to, you know, make clear, and where the lab comes in is, in order to get us on a really pathway: that gets us, you know, to avoid the 2 degrees increase in average temperature, we need much more than $100 billion. $100 billion is an extremely important political benchmark, but it's a starting point.
Monica Trauzzi: Wow. All right, we'll end it there. Thank you for coming on the show. Great discussion.
Barbara Buchner: Thank you so much for having me.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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