The Center for Clean Air Policy (CCAP) convened its third International Dialogue on Enhancing Ambition (IDEA) through Climate Finance on Monday, May 22, 2017, in Barcelona on the margins of the Innovate4Climate conference. This dialogue brought together leading government policymakers and representatives from the Green Climate Fund, international financial institutions and the private sector for a discussion on key issues around effective engagement of the private sector to support ambitious, country-driven climate action in line with Nationally Determined Contributions (NDCs).
National governments, international financial institutions and other relevant actors have a variety of financial instruments at their disposal to mobilize private finance and incentivize private sector action towards low-carbon development. To be effective, these incentives should be complementary to and supportive of national climate mitigation and adaptation plans and efforts. As “indirect” channels for support, as opposed to climate finance provided directly to governments, financial instruments and incentives targeted to the private sector can contribute to climate and development goals by catalyzing transformation of key sectors, enabling access to technology and capital that may be lacking, and helping countries manage debt burdens. With multilateral financing institutions having a significant track record of private sector mobilization in place, for which gaps and lessons learned have been identified, it was an opportune time to consider how best to proceed in the interest of supporting NDC achievement and increased ambition.The objectives of the dialogue were to:
Identify the interests of developing countries in mobilizing private and non-sovereign financing to support NDC implementation;
Take stock of the lessons learned and key gaps from the experience of bilateral and multilateral institutions in financing private sector activities and mobilizing private investment; and
Based on these inputs, inform the approaches of donors and international finance institutions, notably the GCF’s Private Sector Facility.