Independent High-Level Expert Group Review of the Vertical Climate and Environmental Funds

This report, prepared by an Independent High-Level Expert Group (IHLEG) for the Brazilian G20 Presidency and the G20 Sustainable Finance Working Group, reviews the Vertical Climate and Environmental Funds (VCEFs). It assesses the current climate finance gap in emerging markets and developing economies (EMDEs) and provides a strategic framework to optimize VCEF operations and enhance their ability to mobilize sustainable finance.

• There is a significant disparity in global climate finance distribution, with developed countries attracting 44% of finance, while emerging markets and developing economies (EMDEs) and least-developed countries (LDCs) receive only 14% and 2%, respectively.
• To meet Paris Agreement goals, climate investment in EMDEs must increase more than fourfold to USD 2.4 trillion annually by 2030. This requirement includes USD 1.6 trillion for clean energy, USD 250 billion for adaptation and resilience, USD 300 billion for loss and damage, and USD 300 billion for natural capital and sustainable agriculture. EMDEs will require approximately USD 1 trillion per year in external finance, necessitating a fifteenfold increase in private finance, a fivefold increase in concessional finance, and a tripling of multilateral development finance.
• The Vertical Climate and Environmental Funds (VCEFs) consist of the Global Environment Facility (GEF), the Adaptation Fund (AF), the Climate Investment Funds (CIF), and the Green Climate Fund (GCF). Their cumulative resources range from USD 1.6 billion (AF) to USD 32 billion each for the GEF and GCF. Collectively, they have an annual commitment capacity of USD 4 billion to USD 5 billion, with the GCF providing about half. In 2022, annual disbursements were USD 1.4 billion, with disbursement-to-approval ratios between 31% (GCF) and 76% (GEF).
• The IHLEG proposes a strategy to maximize VCEF impact through five key areas: improving efficiency in accreditation and disbursements (especially for LDCs and Small Island Developing States), harmonizing procedures to reduce transaction costs, leveraging comparative advantages to connect with other finance sources, shifting from individual projects to country-driven strategies and platforms, and operating as a system for upstream country programming and pipeline development.

APA

Climate Policy Initiative (2024). Independent High-Level Expert Group Review of the Vertical Climate and Environmental Funds. https://www.climatepolicyinitiative.org/publication/accelerating-sustainable-finance-for-emerging-markets-and-developing-economies/

Chicago

Climate Policy Initiative. Independent High-Level Expert Group Review of the Vertical Climate and Environmental Funds. 2024. https://www.climatepolicyinitiative.org/publication/accelerating-sustainable-finance-for-emerging-markets-and-developing-economies/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Independent High-Level Expert Group Review of the Vertical Climate and Environmental Funds |date=17 October 2024 |url=https://www.climatepolicyinitiative.org/publication/accelerating-sustainable-finance-for-emerging-markets-and-developing-economies/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2024independent, author = {{Climate Policy Initiative}}, title = {{Independent High-Level Expert Group Review of the Vertical Climate and Environmental Funds}}, institution = {Climate Policy Initiative}, year = {2024}, month = oct, url = {https://www.climatepolicyinitiative.org/publication/accelerating-sustainable-finance-for-emerging-markets-and-developing-economies/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }