Six Key Takeaways from the Webinar Series "Reconciling international development financing with the financing of global public goods”.
FERDI organised a webinar series on international development finance and global public goods.
Each webinar focused on one of the following themes:
Through this series of three webinars, which brought together researchers, leaders of international organisations and development practitioners, FERDI explored the conditions for achieving better coordination between development finance and the financing of global public goods.
Six key messages emerged from these discussions. They will inform both the Foundation’s future research and ongoing international debates on the evolution of the international financial architecture.
The discussions converged on a shared conclusion: development finance, climate adaptation finance and climate mitigation finance pursue distinct objectives. Conflating these objectives obscures allocation criteria, evaluation methods, and policy priorities. Making these distinctions explicit emerged as a prerequisite for any meaningful reform of the international financial architecture.
“All these objectives are legitimate, but they are fundamentally different. It is therefore essential to be explicit about the objectives being pursued and then assess the effectiveness of the financing against criteria directly related to each one”. Masood Ahmed
“We have moved from an 'addition' approach to a 'subtraction' approach: rather than being added to development finance, some of the funding earmarked for climate action has replaced it”. Serge Tomasi
“Today, we are seeing a gradual reallocation of concessional resources towards global climate goals, without a sufficient increase in their overall volume. In other words, we are asking the poorest countries to bear a disproportionate share of the cost of the global transition”. Frannie Léautier
The discussions highlighted that allocation criteria should reflect the objectives they are intended to serve: supporting the most vulnerable countries in the case of development and adaptation, while maximising emissions reductions in the case of mitigation. This requires moving beyond one-size-fits-all approaches towards allocation rules that are consistent with each objective.
“Mitigation pursues a global objective, whereas adaptation primarily responds to a development objective”. François Bourguignon
“Adaptation aims first and foremost to offset the additional costs that climate change imposes on the development of the most vulnerable countries; it therefore falls squarely within the scope of development finance”. Patrick Guillaumont
“Responsibilities and capacities are constantly evolving; they can no longer be understood through rigid categories”. Guillaume Pottier
The analyses presented throughout the series showed that funding is not always allocated according to the greatest needs. Despite their high levels of vulnerability, some countries continue to receive relatively little adaptation finance, raising questions about the effectiveness of current allocation criteria.
"Being a low-carbon country has, so far, not been sufficient to attract dedicated funding". Vahinala Raharinirina
"There is no statistically significant relationship between adaptation finance and climate vulnerability, except in the most extreme situations". Sosso Feindouno
"The data show that adaptation finance is not systematically directed towards the most vulnerable countries". Catherine Simonet
“Attention must be brought to the readiness and capacity-building support that needs to accompany this finance, that is very important when specifically talking about adaptation finance (in developing countries)”. Amrita Goldar
Speakers emphasised the need for more robust metrics to better distinguish between the different purposes of international financing, assess its additionality and strengthen donor accountability. New approaches based on artificial intelligence, together with the ongoing development of the TOSSD framework, offer promising opportunities.
"New methods based on artificial intelligence can significantly improve the quality of statistics on development finance. The data already exist; the challenge now is to make better use of them to distinguish between the different purposes of funding". Xubei Luo
"TOSSD was designed as an evolving framework, capable of adapting to new measurement needs and to the priorities expressed by its members". Tomáš Hos
The series highlighted that financing needs now far exceed the capacity of concessional public finance alone. Speakers called for greater mobilisation of the private sector and multilateral development banks, while also broadening the base of contributing countries.
"New high-income countries should also contribute to international financing." Justin Yifu Lin
"Several countries that are not currently listed in Annex II could legitimately contribute to climate finance." Gaia Larsen
“The scale of financing needs is such that they cannot be met through public funding alone. We therefore need to devise mechanisms capable of attracting private investment while also meeting climate objectives.” Karim El Aynaoui
The webinar series concluded with a broad consensus on the need to adapt international rules to better reflect current economic, climate and geopolitical realities, while preserving the principles of solidarity and international cooperation.
“A dedicated allocation should be set aside for the least developed countries: the objective should always be to ensure that the most concessional financing goes to the lowest-income countries.” Désiré Vencatachellum
“We must not give up on climate multilateralism. Despite its shortcomings and the current deadlocks, it remains the only forum where all countries can engage in dialogue on these issues.” Sylvie Lemmet
