As the Copenhagen climate conference approaches, climate finance in a post-2012 international climate change regime has become a central negotiation issue. One key question is what amounts are needed to support the implementation of mitigation and adaptation measures in developing countries. Another debate centres on what mechanisms will best serve the delivery of this challenging task, and how funding streams and results can best be monitored.

On 19-20 March 2009, BMZ through InWent, and in cooperation with the United Nations Foundation, invited for an International Policy Dialogue addressing these very issues. High-level participants included Minister Wieczorek-Zeul and Ministers from Uganda, Indonesia and Luxembourg. Many senior representatives from government, international institutions, civil society and the private sector in both the developed and the developing world were present and ensured a stimulating debate.

One of BMZ’s objectives in organising the conference was to highlight that mitigation and adaptation have been supported through development cooperation channels for years and that important experience has accumulated. The climate agenda has been acknowledged as an integral part of sustainable development and is receiving ever increasing attention by actors concerned with development. Institutions, processes and financing mechanisms of development cooperation are therefore well placed to play a pivotal role in a post-2012 climate finance regime.

At the ongoing climate negotiations, however, many countries and actors, especially from the developing world, are calling for new institutions and financing mechanisms to implement the probably ambitious objectives of a Copenhagen agreement. One major reason behind this is the demand that financial support provided to mitigation and adaptation shall be additional to support provided for the fight against poverty, and shall be counted separately from Official Development Assistance. This can of course be most easily ensured if institutions are separate as well.

At the same time, some conference participants highlighted that developing countries’ governments are already overburdened by the manifold institutions channelling development funding, and that it would be most effective to use existing channels for climate-related funding, too, albeit subjecting them to reform regarding their governance and disbursement mechanisms. They argued that the task at hand was such that single funds under the climate change convention could not possibly deliver on all that was needed, and that all available channels would have to be engaged. All agreed that mitigation and adaptation finance streams must be better accounted for; in this, the OECD/DAC could potentially play an important role.

There was agreement among participants on the basic principles that must underlie effective mitigation and adaptation action: subsidiarity (i.e. decisions shall be taken where action is taking place), national ownership, integrated planning as well as a flexible and context-specific approach. As for the climate negotiations, many participants mentioned the urgent need to build trust between countries from the developing and the developed world in order to reach a successful outcome in Copenhagen. The conference was commended as a small contribution to this major effort.

Laura Schmidt, Climate Change Team, BMZ