Mitigating and adapting to climate change increases the cost of development. Considerable resources are needed in addition to the present levels of official development assistance (ODA) to complement rather than undermine the efforts and progress toward the achievement of development objectives.
This report focuses on the challenges related to monitoring of financial flows towards climate change. It focuses on tracking, monitoring, and reporting of various types of flows, primarily from ODA and other public sources but also from private sources. Then, it looks at possible ways of tracking additionality in ODA flows, with the aim of stimulating discussion.
The report concludes that increasingly reliable, comprehensive, and transparent reporting is needed to demonstrate that new climate finance instruments are not introduced at the expense of those targeting other objectives. Providing exact and comparable figures on additional contributions to fund incremental expenses resulting from adaptation to and mitigation of climate change is extremely complex and probably not possible in an aggregated fashion. Experience with the GEF and carbon finance has demonstrated that while maintaining the environmental integrity of projects, proving the incremental costs related to climate action remains a challenge. In this context, while improving the monitoring of inputs and development of climate finance flows, it is crucial not to lose sight of the key objective of all official development assistance: sustainable development outcomes.