Tracking climate finance flows accurately has become a priority for the climate finance community, including donors, governments, researchers, NGOs and other stakeholders. As a response, the Multilateral Development Banks (MDBs) in 2011 joined forces to develop a methodology to track their climate finance flows in a consistent, comparable, and transparent manner.
International funding committed for mitigation action and adaptation to climate change falls short of the anticipated needs. To address this finance gap, developed countries committed under the Copenhagen Accord (December 2009) and the Cancun Agreements (December 2010) to provide new and additional resources for climate action in developing countries. For the period of 2010–12 this reached approximately US$ 30 billion (Fast-Start-Finance). By 2020, developed countries have committed to mobilise US$ 100 billion per year. This is supposed to originate from different sources, including public and private, bilateral and multilateral, and alternative sources.
Tracking climate finance flows is becoming increasingly important to build trust and accountability with regards to climate finance commitments and to monitor progress and trend. As a response, the group of MDBs - consisting of the African Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank (IDB), the World Bank (WB) and the International Finance Corporation (IFC) – developed methodologies for tracking their mitigation and adaptation finance flows. Reporting started in 2011 and is done on a yearly basis.
In 2013, the MDBs committed close to US$ 24 billion for climate action of which approximately 80% or almost US$ 19 billion was dedicated to mitigation and 20%, or close to US$ 5 billion to adaptation. Of the total commitments US$ 2 billion came from external resources, such as bilateral or multilateral donors, including the Global Environment Facility and the Climate Investment Funds.
The joint tracking approach is work in progress aimed at assisting MDBs, as well as other organisations that might want to join or more clearly understand MDBs’ climate engagement. It informs other tracking exercises, such as CPI, the OECD and that of other DFIs.