UNU-WIDER foreign assistance in a climate-constrained world: foreign assistance in a climate-constrained world.

Author:Arndt, Channing
Position:United Nations University World Institute for Development Economics Research

Projections show that climate finance has the potential to markedly increase total official assistance to developing countries over the next decade. Climate change will impact not only the need for foreign assistance, but also the financial mechanisms, modalities, agreements, and distribution channels for foreign assistance. In our recent paper 'Foreign Assistance in a Climate-Constrained World' we argue that climate finance can act as a catalyst for positive changes in the institutional architecture and distribution mechanisms for financial flows to lower-income countries. Genuine recipient country leadership is necessary in the implementation of co-ordinated development, adaptation and mitigation strategies. Predictable and long-term financial flows are best suited to facing the challenges of development in a climate constrained world.

Climate change is in the process of transforming the environment of the planet over the course of the 21st century. A minimum of approximately two degrees centigrade of warming appears to be built into the climate system in this period. Adaptations to the implications of these temperature rises will be required. Furthermore, although mitigation policies may not succeed in keeping the temperature rise to less than two degrees Celsius, these policies are successful in reducing the chances of extreme temperature rises.

Integrated implementation

Development, adaptation, and mitigation are in reality inseparable policy areas. As such, there is a compelling case for addressing them simultaneously through a coherent, integrated, strategy for poverty reduction and climate action. The adaptation agenda is largely consistent with the development agenda, and mitigation is a vast task cross cutting the whole agenda and as such cannot be pursued in isolation. Consequently, it would be a fundamental mistake to see development, adaptation, and mitigation efforts as separate silos in national implementation. Rather they should be seen in synergy, and contribute to a joint strategy towards poverty reduction and climate action. These synergies notwithstanding, there are areas that merit greater attention in the light of climate change. These include access to sustainable energy, agriculture including payments for environmental services in agriculture and forestry, water management and land use planning.

Rule-based financial flows

While integrated plans and actions are called for at the level of implementation, it must be...

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