Estimates of the costs of addressing climate change in developing countries vary substantially from 480 billion to 1.5 trillion dollar per year.
From our top partner allAfrica
Understanding growing needs for finance to help developing countries address climate change was the first item on the agenda at a workshop on Long Term Finance hosted by the UN Framework Convention on Climate Change (UNFCCC) secretariat in Bonn last month.
How much money do we need?
There are significant differences in the approach and assumptions underlying estimates of the cost of climate change, which make World Bank, McKinsey and UNFCCC numbers difficult to compare.
Many estimates are based on investment needs, rather than the amount of international financial support needed. Global studies provide a useful reminder of the scale of climate finance that we need, but these aggregate figures are too abstract to guide investment choice.
It is difficult to know how to start to meet needs when confronted with a trillion dollar estimate.
We need to break big numbers into manageable pieces
Different countries have different needs for finance, and different priorities. In 2010 the subsidiary body on implementation of the UNFCCC supported the NEEDS project, which worked with 11 countries to analyse need. The findings revealed great differences in scale, from 340 million dollar of estimated need in Ghana, to 11 billion dollar in Mali; however each study took very different approaches to measuring needs.
Better structured bottom-up analysis that emerges from developing countries' efforts to chart a response to climate change can support a process of prioritising how to best to use scarce climate finance to meet real needs.
More detailed work is getting underway in many countries: for example, the government of Colombia has been working to understand the costs of climate change to its economy, and analyse options to finance mitigation.
Such processes can help countries identify appropriate roles for public and private sector institutions, and associated finance - particularly international finance mobilised under the UNFCCC.
To read the full story click here.