Private finance for adaptation in LDCs? Spelling out the options

Stockholm: Stockholm Environment Institute (Discussion Brief)

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As part of the Copenhagen Accord, developed countries committed to mobilize US$100 billion a year by 2020 to address the needs of developing countries. Among the Parties to the United Nations Framework Convention on Climate Change (UNFCCC), and in the context of the Green Climate Fund in particular, there is a strong expectation that a substantial share of this finance will come from private sources. Yet how realistic is this, particularly for Least Developed Countries (LDCs), which are among the most vulnerable to climate change impacts?
This brief presents a comprehensive analytical framework for understanding private adaptation finance. As depicted in Figure 1, the framework focuses on the interaction between enabling environments, mobilization, and delivery mechanisms. It examines not only how investment can occur, but also different ways in which adaptation objectives might fail to be met.