Etude Climat no. 32 'Financing climate actions in developing countries: what role is there for NAMAs?'

Among the publications of CDC Climat Research, 'Climate Reports' offer in-depth analyses on a given subject. This issue addresses the following points: The Nationally Appropriate Mitigation Actions (NAMAs) framework has emerged as a result of the Copenhagen and Cancun Agreements and is used to encourage developing countries to reduce their greenhouse gas (GHG) emissions. Theses NAMAs can be part of more comprehensive domestic low-carbon development strategies. However, new projects and policies, eligible to be considered as NAMAs, will only be put in place if adequate financing is provided by developed countries. This new structure could provide the opportunity to restore trust between Annex 1 countries and developing countries. This Climate Report analyses the difficulties that can arise both during the financing process and the implementation of climate change mitigation measures. The financing issues are related to transparency and the committed and disbursed amounts. The implementation of climate policies in developing countries will require an increase in financing flows. Both the public and private sectors will have to contribute. Whereas the public sector could draw on revenue from new levies, the private sector should be encouraged by acceptable 'risk/reward' ratios. Incentives will also be generated by the implementation of binding global and/or local policies as well as an appropriate governance. This will facilitate private investment both by stabilising the political horizon but also by setting a price for carbon. This study will also examine in some detail NAMAs, which can be an opportunity to implement new financing systems. Whilst short-term solutions exist, they should not be applied to the detriment of long-term solutions. Thus, institutional capacity-building will be needed if we are to create reliable administrations that encourage investment and the country's independence. Their implementation will allow broader GHG reduction policies to be financed. They can also make it possible to correct some of the defects in the current mechanisms, such as the unbalanced geographical distribution of the CDM projects or the traceability of the aid given to developing countries. Access to quality information in order to monitor the progress and the results of the measures is also central to the implementation of NAMAs and the search for financing for them