Climate Finance in the Asia-Pacific: Trends and Innovative Approaches

Filling the climate financing gap not only requires identifying alternative and innovative sources of funds from both the public and private sectors, but also developing the appropriate institutional and policy landscape to redirect existing financial flows towards climate mitigation and adaptation activities that also deliver on sustainable development priorities. Financial flows can be effectively mobilized through a combination of public policies and private investments, backed by new and pioneering financing mechanisms. The Fifth Assessment Report of the IPCC emphasized the need for transformations in economic, social, technological, and political decisions and actions to enable climate-resilient pathways for sustainable development. The report made reference to, among others, a range of policy options for enhancing resource efficiency, with highlight on potential co-benefits and synergies among adaptation, mitigation, and sustainable development. In Asia and the Pacific, the transition from a focus on quantity of growth, to a focus on the quality of growth including redirecting investments to support the natural and human capital base of the economy - has been recognized by a number of forums, including at the fifth and sixth Ministerial Conference on Environment and Development in Asia and the Pacific, where member States identified low-carbon green growth as one of the key strategies to pursue sustainable development. Low carbon development strategies recalibrate the economy to synergise economic growth and environmental protection for a better alignment with sustainable development objectives. Such strategies can help build a climate friendly economy characterized by substantially increased investments in natural capital, while reducing ecological scarcities and environmental risks – and includes activities such as renewable energy, low carbon transport, energy and water-efficient buildings, sustainable agriculture and forest management and sustainable fisheries. Low carbon development strategies must have at their foundation equitable and inclusive social development priorities.