Abstract
Over the past few decades, tackling climate change has persistently featured in international discussions, with the main issues centring on mobilising adequate global response and effectively coordinating and channelling this response at the sub-national levels. In order to effectively mobilize and harmonize resources to address climate change at country level, the idea of establishing national climate finance institutions (NCFIs) with the duty to mobilise, manage and allocate funds to implement climate change actions has gained prominence among developing countries. This study develops an indicator-based framework to evaluate the institutional effectiveness of the Indonesian Climate Change Trust Fund (ICCTF) as a case study. Building on previous frameworks and principles of climate finance, a total of 21 indicators were identified, these indicators were categorized into five effectiveness components, which are: were identified, and these indicators were categorized into five effectiveness components, which include: legal and regulatory framework, fund mobilization and sustainability, fund management and allocation, monitoring and evaluation, and transparency and accountability. We find that the major and fundamental weakness of the ICCTF is its inability to adequately mobilize funds, while its strength is in management and allocation of available resources. Inclusion of the legal and regulatory framework component, which has been largely absent in previous studies, further enabled us to identify critical legal gaps in the operationalization of the ICCTF. While the current legal foundation of the ICCTF ensures transparency and accountability, it significantly constrains the ICCTFs flexibility and innovative potentials.
Highlights
IntroductionOver the past decades has been recognized as a major environmental and developmental challenge
Climate change, over the past decades has been recognized as a major environmental and developmental challenge
We identify the key indicators of effectiveness of national climate finance institutions (NCFIs)
Summary
Over the past decades has been recognized as a major environmental and developmental challenge. Climate change could undermine global progress against hunger, poverty, inequality and other basic developmental challenges (Moss et al, 2013; Preston et al, 2015; Olazabal et al, 2019). Concerning the challenges, additional investments are required to fight against climate change globally. The Paris Agreement sets out ambitious pathways for climate change mitigation and adaptation, including pledges to support poor and developing nations by providing USD100 billion per annum by 2020 through public, private and other innovative sources (Lesnikowski et al, 2017). The support to developing countries was made considering the adverse impacts of climate change are mostly felt by developing countries whose contributed less to CO2 emissions (Schipper, 2007; Ayers and Dodman, 2010; Ayers et al, 2014), through a better land use management (Sahide et al, 2015; Erbaugh and Nurrochmat, 2019; Nurrochmat et al, 2020)
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