European Capacity Building Initiative

The Goal of 100bn USD of Climate Finance: Accounting Issues Regarding Private Finance

Brief Summary

This discussion paper addresses and raises different questions regarding what kind of private finance could be included in the 100bn USD of climate finance, which developed countries committed to mobilize annually by 2020. It argues that not all kinds of private climate finance should be included in the 100bn USD but rather that there is a need for a clear definition on which private finance to include. In addition, it refers to what kind of state action is needed to account the private finance towards the “100bn USD”-commitment (resp. towards the state's share of this commitment). Besides the requirement for a certain level of state involvement, it must be ensured that no double counting with other commitments occurs and hence no finance flows of the carbon market should be accounted. And finally it argues that with regard to both private and public finance flows only net flows should be accounted. Further it raises questions regarding a categorization of different instruments (e.g. grant, concessional loans, guarantees) towards public or private finance. Overall, as much public finance as possible should be provided in order to on the one hand invest into areas which have difficulties for attracting private finance and on the other hand use public funds in a way which can mobilize effectively much more private finance for climate action; therewith lowering the gap between the finance needed and the finance provided.

FC Publication Date: 
14 November 2012
FC Publication: 
Benito Müller