Climate Finance

Climate finance, reducing the negative effects of climate change and activities undertaken to achieve adaptation to these impacts are financially supported. This scope is assessed under headings such as reduction of greenhouse gas emissions, energy transition projects, environmental resilience and technology transfer. Financing can be provided through public and private sources and is channeled through various mechanisms including grants, development loans, green bonds, carbon markets and public-private partnerships.

Historical Development

Climate finance was internationally defined with the United Nations Framework Convention on Climate Change (UNFCCC) of 1992. At the 2009 Conference of the Parties (COP15) in Copenhagen, developed countries pledged to provide annual climate finance of USD 100 billion to developing countries. This commitment was reaffirmed by 2015 Paris Agreement.

Types of Financing

Climate finance can be delivered through grants, loans and market-based instruments. Grant mechanisms are particularly directed toward adaptation projects in developing countries. Loans are typically used for large-scale infrastructure investments and emissions reduction projects. Models in which both public and private sectors jointly provide financing are also included within climate finance. Market-based systems that allow the trading of carbon emissions are evaluated within this framework.

Funds and Institutional Structures

Climate finance is managed through multilateral funds. The Green Climate Fund, established in 2010, supports mitigation and climate change adaptation processes. Structures such as the Global Environment Facility (GEF) and the Climate Investment Funds (CIF) serve similar objectives. In addition, the United Nations Development Programme (UNDP) and the World Bank offer various financial instruments and technical support mechanisms.

Challenges from the Perspective of Developing Countries

Developing countries are unable to fully benefit from climate funds due to insufficient technical capacity, complex application procedures and institutional constraints in accessing finance. These countries often lack adequate project preparation, reporting and management infrastructure. The fact that a significant portion of provided finance is in the form of loans also imposes an additional burden.

Türkiye’s Position

Türkiye is listed among Annex I countries under the UNFCCC and has asserted that it should not be classified as a developed country. This creates a unique situation regarding access to international funds. Türkiye continues to provide climate finance through various development organizations and programs. Additionally, it has taken steps to enhance its capacity in this area, including issuing green bonds and developing financing strategies.