Sources of finance in the international climate change regime

The briefing examines the funding gap for climate change in the global South, specifically Africa, where adaptation costs are projected to reach $30 to $60 billion annually by 2030. It evaluates several funding mechanisms—including direct budgetary contributions, shipping and aviation levies, financial transaction taxes, Special Drawing Rights (SDRs), the redirection of fossil fuel subsidies, and carbon taxes—against criteria for fairness, such as adequacy, predictability, and transparency. The document argues that public funding must be prioritized over private finance and carbon markets, which it claims are often biased toward profitable mitigation projects in middle-income countries and fail to provide meaningful support to the poorest African regions.

• Africa is disproportionately vulnerable to climate change despite contributing less than four per cent of global greenhouse gas emissions. By 2020, rainfed agriculture in the region could decrease by up to 50 per cent, and between 75 and 250 million people may face severe water shortages.
• Direct budgetary contributions from developed countries, as proposed by the G77 plus China (0.5 to 1 per cent of GNP), could generate $200 to $400 billion annually, though this is viewed as politically unlikely due to economic austerity and lack of will.
• Innovative levies on shipping and aviation are proposed as progressive sources of revenue. A $25 levy per ton of maritime fuel could raise at least $25 billion annually, while a global aviation levy based on the French model could generate $10 billion per year.
• A broad-based financial transaction tax (FTT) at a rate of 0.01 to 0.05 per cent could generate up to $650 billion in new global revenue annually, with proponents suggesting a quarter of this be directed toward climate finance in developing countries.
• Carbon markets are deemed ineffective for African countries, as less than two per cent of Clean Development Mechanism (CDM) projects are hosted in Africa, and these represent less than 1.5 per cent of generated credits.
• Private sector finance is criticized for its inherent bias toward profitable mitigation projects in middle-income countries, often neglecting adaptation activities that do not generate profit.

APA

Redman, J., Reyes, O., Reddy, T., Mwenda, M., & Maynard, M. (2012). Sources of finance in the international climate change regime. Institute for Security Studies. https://issafrica.s3.amazonaws.com/site/uploads/ISS_PACJABrief1.pdf

Chicago

Redman, Janet, Oscar Reyes, Trusha Reddy, Mithika Mwenda, and Michele Maynard. Sources of finance in the international climate change regime. Institute for Security Studies, 2012. https://issafrica.s3.amazonaws.com/site/uploads/ISS_PACJABrief1.pdf.

Wikipedia

{{cite report |last1=Redman |first1=Janet |last2=Reyes |first2=Oscar |last3=Reddy |first3=Trusha |last4=Mwenda |first4=Mithika |last5=Maynard |first5=Michele |title=Sources of finance in the international climate change regime |publisher=Institute for Security Studies |date=March 2012 |url=https://issafrica.s3.amazonaws.com/site/uploads/ISS_PACJABrief1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{redman2012sources, author = {Redman, Janet and Reyes, Oscar and Reddy, Trusha and Mwenda, Mithika and Maynard, Michele}, title = {{Sources of finance in the international climate change regime}}, institution = {Institute for Security Studies}, year = {2012}, month = mar, url = {https://issafrica.s3.amazonaws.com/site/uploads/ISS_PACJABrief1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }