Achieving Climate Justice And Equity Through Vulnerability-based Financing

Socio-economic vulnerability and resilience to the effects of climate change should be the primary basis on which climate financing is allocated, especially for public funds under bilateral and multilateral arrangements. This would ensure an equitable distribution of these funds and therefore promote climate justice and equity. Unfortunately, not only are current climate finance levels inadequate, but they are also badly targeted, all to the detriment of countries with the most urgent needs. Some analysis by the OECD show that 70% of all climate finance provided and mobilized by developed countries between 2016 and 2020 went to middle-income countries. This trend contradicts the principles of climate justice and equity in the allocation of climate financing. With the climate change narrative mostly focused on the need for increasing available climate finance, matters of ensuring optimal allocation of the same have largely taken a backseat. This policy brief identifies key challenges and provides recommendations to ensure equitable distribution of climate finance, particularly focusing on African countries. Proposed strategies include establishing clear criteria for vulnerability and resilience assessment, increasing funding for regional climate initiatives, balancing adaptation and mitigation efforts, championing the Loss and Damage Fund, and supporting regulations for fair engagement in carbon markets. Implementing these recommendations could lead to a more equitable allocation of climate funds, better alignment with countries’ priorities, and a significant reduction in the financing gap for climate adaptation and mitigation in Africa.