Enhancing transparency and accountability in climate finance mobilization from developed to developing countries

Abstract

This chapter, developed as part of the Planetary Governance Program at The New Institute, chaired by the Climate Governance Commission, identifies and discusses key climate finance reform proposals to enhance transparency and ability within climate finance governance. It first highlights the need for high-quality climate finance to be transferred from developed to developing countries and the lack of transparency in identifying the majority of climate finance contributions from developed countries. This lack of transparency has exacerbated the gap between exiting climate finance needs and the actual level of finance that is provided by the developed world. As a first step toward addressing these issues, the chapter proposes key governance innovations that build off the Climate Governance Commission’s 2023landmark report, “Governing Our Planetary Emergency”. These proposals include the establishment of common definitions of “climate finance”, stricter accounting rules to tighten standards regarding what qualifies as “climate finance”, the establishment of new climate finance accounting and reporting systems, and the full operationalization of Article 2.1(c) of the Paris Agreement.