Climate finance

ODI has led the way in tracking international support to developing countries and analysing the governance principles that underpin this finance flow.

Woman with solar panel, India. Photo © Abbie Trayler-Smith/ Panos Pictures / Department for International Development

How does ODI support developing countries make the transition to low emission and climate resilient development pathways?

We conduct high quality applied research and provide practical advice to inform and influence policies, practices and public debate on climate finance. We are a trusted partner of governments, international organisations and research institutes, and promote the effective use of finance in meeting the challenge of climate change.

Our work:

  • informs international climate finance policy processes
  • helps shape the design and operations of climate funds
  • supports effective utilisation and management of climate finance in developing countries
  • evaluates options for shifting private investment away from business as usual towards climate change solutions.

Our expertise

ODI specialises in the collection and analysis of climate finance data to produce high quality and innovative research. We have considerable experience in the production of visual tools to improve understanding of complex issues. Our approach combines on-the-ground insights from research partners in developing countries with high-level engagement in global policy processes, such as the UNFCCC and Green Climate Fund. This ensures that our recommendations and policy advice are rooted in each country’s experience.

Why is climate finance important?

Access to adequate finance and investment is essential for countries to reduce greenhouse gas emissions and adapt to climate change. International support for climate action in developing countries can play a vital role in helping these countries make the transition to low emission and climate resilient approaches to development. But we need to understand how finance for climate action is being spent, and whether it is really making a difference.

Climate finance: is it making a difference?

ODI’s 2014 report Climate finance: is it making a difference? provided a comprehensive review of multilateral climate finance spent in 135 countries over the last 10 years. It found that climate finance is beginning to have a positive effect, spent in the right places and on activities that make sense. But we need more flexible finance that targets countries’ needs better if we are to really help transform the global economy.

Our research

Our dedicated research team offer the skills, knowledge and insight to address key questions about how we continue to improve the effectiveness of climate funds. Examples of our work addressing emerging issues include:

How can climate finance add value to existing aid flows in the agriculture sector?

Food and livelihoods in a changing climate: the role of climate finance for agriculture – Marigold Norman

Existing climate funds have largely overlooked highly food-vulnerable fragile states, SIDS and high agricultural GHG emitters. It identifies options for taking a more strategic approach to financing climate compatible agriculture.

How can cities access external support for climate compatible infrastructure investment?

Climate finance for cities: how can climate funds best support low-carbon and climate resilient urban development? – Sam Barnard

This paper reviews the approaches taken by multilateral climate funds in the period 2010-2014 to support low-emission and climate-resilient development in developing country cities.

Can climate finance promote investment in building resilience?

Does adaptation finance invest in disaster risk reduction? – Alice Caravani

This paper argues disaster risk reduction (DRR) financing could be filled by adaptation funds that have the capacity to invest directly in DRR activities.

Climate Funds Update

Launched in 2010, Climate Funds Update is the only independent initiative that tracks the operations of dedicated climate funds. It is the go-to resource for information on the latest developments in international climate finance, and analysis of the effectiveness of multilateral funds. We track climate finance from pledge to project implementation, offering open access data to enhance the transparency of global finance flows.

Climate change finance in Ghana

Ghana’s Ministry of Finance invited ODI to help it develop its climate policy and associated financing approach. The report, Climate change finance in Ghana recommended improving access to information and supporting local action. Widespread national media coverage stated that the study strengthened Ghana’s negotiating position at the upcoming UN climate negotiations. At the meeting to launch the report, Mona Quartey, Deputy Minister of Finance and Economic Planning, stressed that the work ‘would go a long way to promote effective and efficient public climate finance delivery in Ghana.’