The politics of climate finance coordination

This policy brief by the Stockholm Environment Institute examines the political challenges hindering the coordination of climate finance at both global and national levels. It focuses on the overlapping roles of the Climate Investment Funds (CIF) and the Green Climate Fund (GCF), and how domestic bureaucratic politics in recipient countries like Kenya and Zambia affect the implementation of climate finance.

• Climate finance coordination is hindered by political differences and divergent interests among the various ministries involved in governing multilateral climate funds.
• The Climate Investment Funds (CIF) and the Green Climate Fund (GCF) struggle to coordinate due to overlapping mandates and a lack of clarity regarding their respective comparative advantages. While the CIF was originally intended as a temporary fund with a sunset clause, it remains active, leading to resource competition, such as in 2019 when both funds sought recapitalization simultaneously.
• Coordination challenges at the global level are exacerbated by the fact that contributor governments often use different internal units to manage relations with the CIF and GCF, reflecting a divide between those handling multilateral development banks and those handling United Nations entities.
• At the national level, there is ongoing debate over which government bodies should lead climate finance coordination. While 60% of Green Climate Fund National Designated Authorities (NDAs) are environment ministries, others are finance ministries or cross-governmental offices. Environment ministries offer technical expertise, whereas finance ministries provide political influence and the ability to manage large funding volumes.
• National coordination structures vary by country: in Kenya, the National Treasury serves as the GCF NDA and CIF focal point via its Climate Finance and Green Economy Unit, while the Ministry of Environment and Forestry coordinates climate-change activities. In Zambia, the Ministry of National Development Planning acts as the GCF NDA, prioritizing a cross-sectoral planning function.
• Existing development aid coordination frameworks often conflict with climate finance goals because they are compartmentalized by sector, whereas climate action requires cross-sectoral integration. Furthermore, different international organizations have different institutional preferences for domestic partners: the World Bank typically prefers ministries of finance, while UN organizations prefer environmental or sectoral ministries.

APA

Lundsgaarde, E., Adams, K. M., Dupuy, K., Dzebo, A., Funder, M., Fejerskove, A. M., Shawood, Z., & Skovgaard, J. (2021). The politics of climate finance coordination. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2021/10/211015a-burton-shawoo-climate-finance-pb-2109f-final.pdf

Chicago

Lundsgaarde, Erik, Kevin M. Adams, Kendra Dupuy, Adis Dzebo, Mikkel Funder, Adam Moe Fejerskove, Zoha Shawood, and Jakob Skovgaard. The politics of climate finance coordination. Stockholm Environment Institute, 2021. https://www.sei.org/wp-content/uploads/2021/10/211015a-burton-shawoo-climate-finance-pb-2109f-final.pdf.

Wikipedia

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BibTeX

@techreport{lundsgaarde2021politics, author = {Lundsgaarde, Erik and Adams, Kevin M. and Dupuy, Kendra and Dzebo, Adis and Funder, Mikkel and Fejerskove, Adam Moe and Shawood, Zoha and Skovgaard, Jakob}, title = {{The politics of climate finance coordination}}, institution = {Stockholm Environment Institute}, year = {2021}, month = sep, url = {https://www.sei.org/wp-content/uploads/2021/10/211015a-burton-shawoo-climate-finance-pb-2109f-final.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }