Funding commitments in transition

Dutch climate finance for development

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© Carel de Groot

Results — Evaluation Dutch climate finance for development

Over the past decade, the issue of climate change has played a prominent role in Dutch development cooperation and foreign policy. The Netherlands aimed to reach poor countries and target finance for adaptation to climate change. Did Dutch aid reach the intended countries, and which sectors and target groups benefitted? The Netherlands also used ODA to mobilise private sector finance. What was the additionality of these public funds? And what should future climate finance look like? This evaluation, as part of a larger set of studies on climate change policy, provides answers to those questions.

Introduction

Over the past decade, the issue of climate change has played a prominent role in Dutch development cooperation and foreign policy. Climate action has become an important and urgent topic on the international agenda  - culminating in the Paris Agreement - and climate finance to support developing countries is a crucial instrument for action. The Netherlands committed itself to contributing to the joint objective of supporting developing countries with at least 100 million USD a year from 2020. It aimed to reach poor countries and target finance for adaptation to climate change. Did Dutch aid reach the intended countries, and which sectors and target groups benefitted? The Netherlands also used ODA to mobilise private sector finance, blending public and private funds. What was the additionality of these public funds? And what should future climate finance look like: should donor countries use ODA, mainstream climate into assistance and/or green all of their policies and financial flows? This evaluation, as part of a larger set of studies on climate change policy, provides answers to those questions.  

Sand bags to protect built area from flooding, Jakarta, Indonesia
©Carel de Groot
Sand bags to protect built area from flooding, Jakarta, Indonesia

Conclusions and recommendations

1. Reach of Dutch climate finance

2. Additionality of ODA in blended finance for climate action

Blended finance: phases in support to private sector development
Blended finance: phases in support to private sector development

For this study, we developed a conceptual framework that distinguishes between the different private sector development phases that a successful development project may pass through: from innovative ideas (new products or new markets) with an uncertain, risky business case, to mature, less risky business cases, ready to be scaled up commercially.

3. Discussion and recommendations for future climate finance

Following international and Dutch commitments to the Paris Agreement and earlier climate agreements, work to increase support for climate action in developing countries is needed at three levels simultaneously, which we present here in three pathways: (i) dedicating climate finance for development, (ii) mainstreaming climate into development assistance, and (iii) aligning all policies and finance flows to climate objectives.

Three pathways to support climate action in developing countries: (i) dedicated climate finance, (ii) climate mainstreaming of ODA, and (iii) alignment of all policies and finance flows with climate objectives.
Three pathways to support climate action in developing countries: (i) dedicated climate finance, (ii) climate mainstreaming of ODA, and (iii) alignment of all policies and finance flows with climate objectives.