Learning for Climate Change Mitigation Finance from Development Assistance

The report evaluates development financing experiences to provide evidence on how climate change mitigation finance can be effectively channelled to developing countries. It finds that donor guidelines, rather than sector or country, primarily determine the nature of financial assistance and reporting. The authors argue that programme-based funding is generally preferable to project-based funding for achieving large-scale change, and suggest that a multi-donor trust fund could facilitate the necessary harmonisation of reporting and verification standards.

• Development practitioners and literature generally prefer programme-based financial assistance over project-based funding because programmes offer long-term support, greater flexibility, and better evidence of local ownership, whereas projects are often limited by strict contracting and short lifespans.
• The nature of financial assistance, including reporting and verification mechanisms, is primarily determined by the donor institution rather than the specific sector or the recipient country.
• Overseas Development Assistance (ODA) is identified as the most adequate form of financial assistance due to existing expertise in developing countries, provided that mitigation finance is additional to existing ODA.
• There is a tension between Direct Budgetary Support (DBS) and earmarking; while DBS allows for greater national decision-making, earmarking is considered preferable for mitigation finance to ensure funds are tied to specific purposes and to reduce the risk of corruption.
• Harmonisation of reporting and verification mechanisms is essential to reduce the administrative burden on developing countries, which often lack the institutional capacity to meet diverse donor requirements.
• A multi-donor trust fund administered by a multilateral body (such as the UN or World Bank) is proposed as a suitable intermediary structure to combine the expertise of bilateral donors with the flexibility and harmonisation of a multilateral approach.
• The report suggests that 'shadow reporting' by civil society organisations, similar to practices used for the Universal Declaration of Human Rights, could be a useful verification mechanism for climate mitigation finance.
• Public funding can act as a catalyst for private sector investment in development, a mechanism that may be applicable to financing transitions to low-carbon economies.

APA

Urban, F., & Wolcott, S. (2009). Learning for Climate Change Mitigation Finance from Development Assistance. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2014/11/isda-learning-from-development-assistance-sept-2009-report1.pdf

Chicago

Urban, Frauke, and Sara Wolcott. Learning for Climate Change Mitigation Finance from Development Assistance. Climate Strategies, 2009. https://climatestrategies.org/wp-content/uploads/2014/11/isda-learning-from-development-assistance-sept-2009-report1.pdf.

Wikipedia

{{cite report |last1=Urban |first1=Frauke |last2=Wolcott |first2=Sara |title=Learning for Climate Change Mitigation Finance from Development Assistance |publisher=Climate Strategies |date=September 2009 |url=https://climatestrategies.org/wp-content/uploads/2014/11/isda-learning-from-development-assistance-sept-2009-report1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{urban2009learning, author = {Urban, Frauke and Wolcott, Sara}, title = {{Learning for Climate Change Mitigation Finance from Development Assistance}}, institution = {Climate Strategies}, year = {2009}, month = sep, url = {https://climatestrategies.org/wp-content/uploads/2014/11/isda-learning-from-development-assistance-sept-2009-report1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }