ASSESSING THE ALTERNATIVES: Financing climate change mitigation and adaptation in developing countries

of the new economics foundation Financing climate change mitigation and adaptation in developing countries ASSESSING ALTERNATIVES THE About the author Dr Stephen Spratt is Research and Programmes Director at the new economics foundation (nef). Prior to joining nef Stephen lectured in international finance and development at the University of Reading and was Head of Research at Intelligence Capital Limited, a City-based research institution specialising in financial market research from an international development perspective. Before this, Stephen was at the Institute of Development Studies, University of Sussex, where he worked on various research projects relating to financial and economic reform and international development, during which time he was also a Visiting Fellow in the Global Research Department at State Street Bank & Trust, the world's largest financial custodian. His research interests include: financial market stability, financial crises, developmental and environmental consequences of financial shocks, adaptation to climate change, innovative financing mechanisms, national and international regulation, international capital flows and the governance of international financial institutions. He has published widely on all of these issues. Stephen holds a BA from the University of East Anglia, an MSc from the Acknowledgements Particular thanks for their valuable comments during the evolution of this work are due to Society Institute without whose generous support this project would not have been possible. Contents Executive Summary 4 Introduction 9 Part 1 The context 10 1.1 International institutions and commitments made by the 11 developed economies 1.2 Estimates of financing requirements 12 1.2.1 Mitigation 12 1.2.2 Adaptation 13 1.3 Responsibility and capacity to pay 15 1.4 Current mechanisms for adaptation and mitigation 19 Part 2 The assessment 21 2.1 Defining the criteria 21 2.1.1 Mitigation 21 2.1.2 Adaptation and mitigation criteria 21 2.2 A typology of proposals 23 2.3 Organising the proposals into the typology 24 2.3.1 A typology for mitigation proposals 24 2.3.2 A typology for adaptation proposals 31 2.4 Applying the first order criteria set 38 2.4.1 Assessing the mechanisms against the first order criteria set 39 2.5 Applying the second order criteria set 46 2.5.1 Assessing the mechanisms against the second order criteria set 46 2.6 Ranking the proposals 50 2.6.1 A recommendation 50 Executive summary The global climate is changing, fast. And this is the direct result of human activity. It is broadly accepted that we need to restrict global temperature increases to as far below 2°C as possible if we are to avoid …