Making Climate Finance Effective

Abstract

The goal of this article is to support policy and decision-makers of the climate and development community in understanding what makes climate finance effective, especially given that increasing the volume of financing alone would not be sufficient to address the climate change challenge and achieve the goals of the Paris Agreement. Therefore, using resources more effectively becomes a key consideration. To this end, this article identifies and discusses important factors to enhance the effectiveness of climate finance. It argues that strengthening the effectiveness of climate finance is crucial to achieving better results. The following three key factors for making climate finance more effective are introduced and discussed: i.) A strategic planning process which identifies country-level climate priorities; ii.) Climate finance goes towards interventions that bring transformation; and iii.) Additional financial resources are mobilized.