UNDP Readiness for Climate Finance

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The paper presents a framework for understanding what it means to be “ready” to use climate finance in a transformative way at the national level. In the context of the financial challenges posed by climate change, including the scale of financing required and the barriers to the effective use of climate finance (international and domestic; public and private), the paper presents a four-part framework through which to understand the different components of readiness and the specific capacities needed to underpin it. In this paper climate finance readiness is defined as the capacities of countries to plan for, access, deliver, and monitor and report on climate finance, both international and domestic, in ways that are catalytic and fully integrated with national development priorities and achievement of the MDGs. By laying out this framework, the paper attempts to organise the many targeted support programmes, guidebooks, publications, and toolkits on climate finance—offered by a range of international, regional, and national partners. This paper itself is not intended as a guidebook per se, but rather as an introduction to both the national challenges arising from increasing flows of climate finance and some examples of the routes available for overcoming these challenges. The intended audience for the paper is policy-makers at both the international level and national level in developing countries. For an international audience the paper illustrates the critical importance, but also the breadth and complexity, of what is need to be “ready” at the national and local level. For a national audience, the paper aims to provide a framework to organise the plethora of tools, mechanisms, and modalities available from different development partners— ultimately improving the capacity of policy-makers to put in place nationally-appropriate systems to manage climate finance.