Climate Change is regarded as a key environment and development challenge for the 21st century. Affecting every continent, Climate Change impacts threaten to undo progress made toward poverty reduction and the achievement of the Sustainable Development Goals. Governments agree that Business-As-Usual development will not suffice — countries need a new way forward that helps their economies grow in a manner that acknowledges the pressing reality of climate change. Countries must transition toward a new paradigm that supports low-emission, climate-resilient development, shifts production and consumption processes to emit fewer greenhouse gases and promotes sustainable development. Ushering in a new development paradigm requires a dramatic increase in climate change finance.
Climate Change finance is crucial to the successful implementation of the National Climate Policy. Zimbabwe remains a highly climate-sensitive country owing to both observed and anticipated changes in climate. The multifaceted impacts of climate change in the key sectors of the economy, such as agriculture, the industrial sector, biodiversity, rangelands, water resources, health and human settlements and tourism require private-public synergies and continuous and predictable financial flows. As such, several sector-specific adaptation options identified have been constrained by paucity in adaptation funding. For instance, efforts to promote irrigation development through dam construction and adoption of rainwater harvesting technologies to cope with drought and water scarcity have been severely hampered by lack of funds. Similarly, although the country has prioritised sustainable energy development under mitigation intervention, funding and technical capacity to support the transition into low-carbon energy generation and supply, and to implement energy-efficient options, is still lacking.
Recognizing this, Governments gathered at the UNFCCC Climate Change Conference in Cancun and pledged $30 billion in “fast start” funding — climate funds pledged between 2010 and 2012 — and up to $100 billion annually by 2020. These pledges have been matched by an explosion of public and private funds outside of the UNFCCC process, offering countries new resources to undertake climate change mitigation and adaptation actions. The increase in Climate Change funding opportunities makes it important for countries to consider how to attract and leverage different types of climate change investment, including that from private sources. The International Energy Agency (IEA) estimates that about 40% of the global additional investment needed in Climate Change finance in 2020 will come from private households, 40% from businesses and the remaining 20% from government. With private sector funds outnumbering government funds by an enormous margin, a key challenge for countries will be to use scarce public funds to attract private investment. Public funds — such as those under the UNFCCC — must be leveraged in strategic ways to attract new resources from the private sector.
The dramatic increase in opportunities to access climate finance is matched by equally increasing complexity. The requirements, processes and reporting associated with the many funds can be confusing and overwhelming. Countries are faced with the challenge of how to identify which funds are appropriate for them, how to coordinate the actions funded by them, and how to develop the methods to monitor and evaluate the results. Further, countries must also figure out ways to blend funds together so that multiple sources can support climate change initiatives. This will be necessary to finance a complete transformation toward low-emission and climate-resilient development.
One tool that the nation can use to meet this challenge is establishing a National Climate Fund (NCF). NCF provides the country with a driven system that can support climate change goal setting and strategic programming, oversee climate change project approval, measure project implementation and performance, offer policy assurance and financial control of climate change funds and assist with partnership management. NCFs help countries to blend various resources together at the national level, providing a mechanism for shifting power away from traditional top-down fund management to country-level management.
Designing an NCF requires carefully considering its objectives and then crafting a structure that supports the achievement of these objectives. A National Climate Fund must be carefully designed to align with national objectives and capacities on climate change. To accomplish this, a consultant is required to help design Zimbabwe’s architecture for establishing a National Climate Change Fund in line with National Climate Policy. The National Climate Change Fund architecture should ensure the collection, blending, and coordination, as well as strengthening national ownership, of climate finance so as to support country-driven climate change priorities based on national circumstances and realities.
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