Governing climate finance

The report investigates the governance of climate finance in the Global South, arguing that current mechanisms often prioritize mitigation over adaptation and corporate profit over local needs. Through case studies in Africa, Asia, and Latin America, it highlights systemic issues including the 'greenwashing' of industrial activities, the marginalization of indigenous land rights, and a lack of transparency in fund disbursement. The authors advocate for a normative framework based on democratic governance, downward accountability to vulnerable communities, and the separation of public and private funding sources to ensure climate finance addresses actual developmental and environmental needs.

• There is a significant global imbalance between funding for mitigation and adaptation, with mitigation receiving ten times the resources of adaptation in terms of pledges.
• The Clean Development Mechanism (CDM) is often used by large corporations to 'greenwash' their image without fundamentally altering their emissions profiles or benefiting local communities.
• In Africa, the distribution of CDM projects is highly skewed, with South Africa receiving a disproportionate share of the continent's projects, while Africa as a whole has received only 2.6% of global transactions.
• REDD initiatives in regions like the Congo Basin and Tanzania risk facilitating 'land grabs' by allowing governments to allocate indigenous lands to foreign agro-industrial companies under the guise of conservation.
• In Asia, climate finance is heavily driven by the availability of funds rather than national needs, leading to a preference for mitigation projects that align with 'green growth' and economic expansion goals.
• The governance of climate finance often suffers from conflicts of interest, such as when the same national authority is responsible for both promoting and regulating the CDM.
• Direct access to the Adaptation Fund is limited by the difficulty developing countries face in achieving National Implementing Entity (NIE) status, with Senegal being a rare African example of success.
• Carbon offset mechanisms can create perverse incentives where companies profit from both the exploitation of forests and the prevention of their destruction.
• The use of 'additionality' as a criterion for CDM projects is frequently abused, allowing projects that would have happened anyway to claim carbon credits.
• Climate finance disbursement often lacks downward accountability, meaning that while institutions are accountable to donors, they are not accountable to the local communities most affected by the projects.

APA

Reddy, T. (2012). Governing climate finance. Institute for Security Studies. https://issafrica.s3.amazonaws.com/site/uploads/ClimateChangeFinanceSep2012.pdf

Chicago

Reddy, Trusha. Governing climate finance. Institute for Security Studies, 2012. https://issafrica.s3.amazonaws.com/site/uploads/ClimateChangeFinanceSep2012.pdf.

Wikipedia

{{cite report |last1=Reddy |first1=Trusha |title=Governing climate finance |publisher=Institute for Security Studies |date=2012 |url=https://issafrica.s3.amazonaws.com/site/uploads/ClimateChangeFinanceSep2012.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{reddy2012governing, author = {Reddy, Trusha}, title = {{Governing climate finance}}, institution = {Institute for Security Studies}, year = {2012}, url = {https://issafrica.s3.amazonaws.com/site/uploads/ClimateChangeFinanceSep2012.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }