Background
Parties to the United Nations Framework Convention on Climate Change are aware that the available international financial flows and public and private resources cannot also lead to a meaningful transition to a low-carbon economy, nor can they address much-needed large-scale adaptation measures.
Additionally, if the level of resources for the climate change funds under the UNFCCC continue at their present rate, funding will be insufficient to address the future financial flows estimated to be needed for adaptation and mitigation under a strengthened future climate change regime post- 2012.
This is why the UNFCCC Parties meeting for the United Nations Climate Change Conference in Nairobi in 2006 asked the UN Climate Change Secretariat to make an assessment of investment flows needed in 2030 that will be necessary to meet worldwide mitigation and adaptation requirements.
A review entitled Report on the analysis of existing and potential investment and financial flows relevant to the development of an effective and appropriate international response to climate change was conducted by the secretariat of the UNFCCC in 2007.
The review provides an analysis and assessment of investment flows in 2030 that will be need to meet worldwide mitigation and adaptation requirements under the different scenarios of social and economic development, and the impacts this has on developing countries.
A number of international financial institutions, UN agencies, intergovernmental organizations and non-governmental organizations, other relevant agencies, and representatives of the private sector and civil society participated in a consultative process and shared their experience and views on existing and planned investment and financial flows.
Given the limited amount of time available to prepare the papers (6 months), the work was based on existing work and analysis wherever possible. Existing work used for the report includes the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Reports of Working Groups I, II and III, International Energy Agency (IEA), World Energy Outlook (WEO-2006), Stern Review and other published literature.
The results should be seen as indicative only. They should be seen as broad contours of what would be needed rather than exact figures. Further work in assessing investment and financial flows is needed.
The review found that the additional investment and financial flows in 2030 to address climate change amounts to0.3 to 0.5% of global domestic product in 2030 and 1.1 - 1.7% of global investment in 2030. This is large compared to funding currently available under the UNFCCC and its Kyoto Protocol, but small in overall global figures.
