At the UN Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) in Copenhagen in 2009 (COP15), developed countries committed to mobilise long-term climate finance to address the needs of developing countries until 2020. The Copenhagen Accord suggested that this ‘funding will come from a wide variety of sources, public and private’. The High Level Advisory Group on Climate Change Financing (AGF) to the UNFCCC (among others) has since emphasised the need to mobilise private sector finance
– a response, in part, to the scarcity of public resources (UNFCCC, 2010 and AGF, 2010).
This makes it imperative to understand the early efforts of the UK and other donors in mobilising private sector engagement in climate compatible development (CCD), and identify key trends.
In the absence of agreed definitions for private finance activities in the climate finance literature and community of practice, this Background Note proposes a definition for Private Climate Finance Support (PCFS) and reviewsinterventions by British actors to mobilise private sector activity.
It finds that the UK has a number of channels and instruments through which it is supporting private sector action on climate change. Many of these are managed by intermediaries, with variations in their approaches to public reporting on goals and outcomes. Private equity firms, in particular, have disclosed little information to the public on the particular projects and recipients that they are financing. For UK interventions where project level information is disclosed, our review finds that, the majority of private finance climate support (PCFS) goes to climate change mitigation programmes and projects in upper middle-income countries.