Multilateralism must be at the core of our climate response

As world leaders, CEOs and champions from civil society gather in Azerbaijan for COP29 this month, one issue stands above all others: How the world is going to foot the bill for the increasingly urgent global transition to net zero greenhouse gas emissions and a more climate-resilient future.

Talks in Baku have centered on reaching agreement over a new climate finance goal to replace the Paris Agreement pledge of at least $100 billion per year for developing countries. This increased financial support will be crucial to enabling a just transition and enhanced ambition in the forthcoming round of climate action commitments – or Nationally Determined Contributions – due in 2025. It is also vital to enable developing countries to address the worsening impacts of climate change and implement the global goal on adaptation.

UNFCCC Executive Secretary Simon Stiell has called this a “stand-and-deliver COP.” But just as important as how much finance is committed is how that funding is delivered and who has access. Climate finance must be equitable, transparent, predictable and sustainable if we are to avoid a two-speed transition where those most at risk from climate impacts are denied from low-emission, climate-resilient development by the high cost of capital and unsustainable levels of debt.

Increased climate investment in developing countries is not only just, it is an essential element in a global response to our common crisis. When it comes to clean energy and climate-resilient communities, we simply cannot afford a world of haves and have-nots. To fail to invest now is to fail to reach our climate targets – a price none of us can afford to pay. As heads of the four Multilateral Climate Funds, we believe fit for purpose access to grant-based and concessional financing is key. And we know that this finance must be delivered transparently, in line with country priorities, and with backing from global partnerships and expertise to be most effective.

Meeting this need is precisely the role of the Adaptation Fund (AF), the Climate Investment Funds (CIF), the Global Environment Facility (GEF) and the Green Climate Fund (GCF). We play an important role in the development finance landscape, including as enablers of wider climate action from financiers such as multilateral development banks and the private sector.

Our funds have been created specifically to address climate change and other global environmental challenges. All provide grants or concessional financing to developing countries in support of their building greener, more inclusive economies and resilient societies. All work with our national partners to deliver not only funding, but access to local and international expertise, building their capacity in areas from green financial innovation to nature-positive governance.

Together we have channeled nearly $50 billion for climate and environmental action since our funds were established, mobilizing a further $250 billion in co-financing from public and private sector partners.

Our work to date has already proved that our funds are vital to national efforts to safeguard communities, contain emissions, adapt and build resilience. But we believe we could and should do much more. Over the past decade, annual funding channeled through the Multilateral Climate Funds has amounted to less than three percent of international public climate finance provided to developing countries.

We believe that by acting together, our funds have the capacity to deliver the long-term partnership and sustained engagement that is essential to a just transition. By engaging with our national partners over long time horizons, we provide support beyond traditional political cycles, building on each other’s efforts to incubate innovation, de-risk investments, and open the financial flows that create the foundations for thriving clean energy economies and inclusive climate-resilient societies. Today, in response to calls from our shareholders and stakeholders, we are working to present a more coherent set of funding options to our country partners in support of their climate ambitions.

At COP28, we pledged to a joint action plan to elaborate how we will work together. We are already advancing this work by aligning our indicators and processes and coordinating our planning to ensure our future investments complement and build on each other.

Our vision is grounded in closer collaboration around simplifying access to funding, increasing impact, and supporting reform of the international climate financial architecture. We are striving to avoid duplication, clarify the advantages offered by each fund, and streamline processes to more effectively meet the needs of our country partners. In particular, over the last two years, our organizations have collaborated with a view to developing a joint results agenda. This involves implementing a common approach and framework to measure climate results in our operations and future programming.

We have also heard and are responding to the calls for greater alignment of accreditation and access requirements, and flexibility in the design and implementation of programs and projects, including through expansion of locally led programming and channeling of funds directly to partners in developing countries. We are uniquely placed to ramp up funding for adaptation to climate change – especially in the Least Developed Countries and Small Island Developing States. And we are expanding our efforts and capacities to mobilize larger and more varied climate investments by the private sector.

While significant differences remain among those negotiating a new way forward on international finance for climate action, one thing there is consensus on is the need to facilitate developing country leadership and access to climate funding at speed and scale.

We believe that the Multilateral Climate Funds offer a proven and cost-effective mechanism to meet the unprecedented global challenges before us. With our complementary mandates, strategies and programming, together we are stronger than the sum of our parts and we are ready to channel a substantially larger proportion of climate finance to where it can have the greatest impact.

This is the case we are in Baku to make. We believe that whatever agreement emerges at COP29 on the new climate finance goal, the Multilateral Climate Funds will have a key role to play. We are ready to multiply our efforts, and we look forward to collaborating to put our full collective strengths and capacities to work to support the aspirations of our developing country partners.