Attracting Climate Finance for Low Emission Development – The Low Emission Capacity Building Programme hosts their Annual Global Meeting in Hanoi, Viet Nam
A long-term policy vision on climate change that is enshrined in – and aligned with – national development policies and planning was considered a key success factor for encouraging sustainable, low-emission development in developing countries. Identifying and applying the appropriate mix of financial and policy levers were also understood as crucial to attracting private sector investment. These were among the main takeaways from the UNDP Low Emission Capacity Building (LECB) Programme’s annual global meeting, which took place from 25 to 27 September in Hanoi, Viet Nam. Reflecting on the advancements of LECB countries, the meeting focused on attracting climate finance for low emission development and included discussions on the preparation of Low Emission Development Strategies (LEDS) as well as national presentations, and a skills-based training course on climate finance.
The meeting was attended by over 70 individuals, including representatives from LECB countries and colleagues from three key ministries (finance, planning and environment), representatives from relevant global programmes and institutions, such as the LEDS Global Partnership, KfW Development Bank, United Nations Industrial Development Organization (UNIDO), United States Agency for International Development (USAID), the secretariat of the United Nations Framework Convention on Climate Change, Japan International Cooperation Agency, the Overseas Environmental Cooperation Center, the Asia LEDS Partnership, and experts from ETH Zurich and the Grantham Research Institute, as well as colleagues from the three donors agencies – the European Commission and the Governments of Germany and Australia.
The three-day meeting followed a natural progression for low emission development, including a focus on national experiences and best practices for low emission development (day 1), climate finance (day 2) and a merging of the two thematic streams (day 3) by introducing models for creating an enabling environment to catalyse investment in low emission development.
In addition to traditional presentations and moderated discussions, the meeting included a ‘Finance Clinic’ which allowed participants to choose up to two topics of interest to ‘deep dive’ into during 90-minute small group sessions. These skills-based trainings, along with thought-provoking presentations on finance and barriers to investment, proved to be highly popular among national representatives, donors and global experts alike.
Among the key findings from research commissioned by the LECB Programme’s Global Support Unit, presented by Alina Averchenkova on ‘Barriers to Investment’, was that governments believe the biggest barrier to developing LEDS is technical capacity, but the most important barrier to moving forward in implementing LEDS is access to finance. However, the same research found that for donors and investors, the issue is not availability of finance or technology; rather, it is the lack of financeable and implementable projects.
These findings reinforced the message from ‘Finance Fundamentals’, which noted that private investment decisions are mainly guided by the risk-reward profile of the investment opportunity and that developing countries typically face higher financing costs for low-carbon investments because of real (or perceived) risks. However, applying an effective mix of policy and financial instruments can create a favourable investment environment. These topics, among other things, will continue to be explored through the UNDP LECB Programme.
The full agenda and all presentations can be accessed on the LECB website.