In the face of intensifying climate change impacts and the urgent need for ambitious climate action, finance and other means of implementation have been identified as key enablers. However, many developing countries lack sufficient domestic resources to fully address the impacts of climate change on their territories, people, and economies, while global funds mostly target the regional or national level and may not reach the ground.

‍

The 29^th meeting of the Conference of the Parties to the UNFCCC is set to begin on November 11^th, 2024, and finance is at the top of the agenda. Key negotiation items related to finance include the new collective quantified goal on climate finance (NCQG), guidance to the operating entities of the Financial Mechanism, matters related to the Adaptation Fund and doubling of adaptation finance, and the further operationalization of the new Fund for Responding to Loss and Damage (FRLD).

‍

Against the backdrop of the global climate negotiations, which aim to provide and mobilize new and additional resources for developing countries, it is important to consider how funds such as the FRLD, the Adaptation Fund, or the Green Climate Fund (GCF) can ensure that they ultimately reach the ground level. Vulnerable groups and communities, cities, regions, and local governments are already facing severe climate-related impacts, and they need support to develop and implement context-specific solutions. Finance, alongside other means of implementation, is a key enabler for climate action, and especially for adaptation and responding to loss and damage (L&D), a major part of this action takes place at the subnational and local level.

‍

Local-level access to finance

‍

While the impacts of climate change are already severely felt on the ground, accessing finance at the local level at the required scale and speed remains a challenge. This persists despite clear evidence documenting the specific needs of subnational actors, including communities, local governments, cities, and regions, in response to the changing climate. Particularly for those who are most vulnerable, investments into adaptation, resilience-building, and responding to L&D are essential to protect human lives, livelihoods, health and wellbeing, social cohesion, and cultural heritage. However, there is currently a mismatch between these clear needs on the ground and the ability of sub-national actors to access climate finance.

‍

Modalities and provisions for local-level access to climate finance are critical for the successful implementation of climate action and long-term resilience-building based on principles of equity and climate justice. Key recommendations to achieve this include the following:

‍

• Local capacity-building: Build the capacities of local actors to access finance.
• Programmatic approaches: Explore direct budget support as an alternative to project-based funding and build long-term partnerships.
• Layered approaches: Create layered or tiered multi-actor systems for M&E, MEL, data, and knowledge-sharing.
• National frameworks: Establish frameworks for local funding allocation and distribution, and set policy targets for local-level access to climate finance.
• Data-driven: Track the flows and impact of climate funds locally and establish relevant metrics or markers.
• Fast-track accreditation: Develop systems for fast- tracked (re)accreditation, e.g., by “grandfathering” entities already accredited with other funds.
• Developing a list of criteria: Work to ensure functional equivalence and compliance with minimum standards.
• Build-in support: Support local actors, e.g., with project preparation facilities, automatic kick-off funding for proposals, provision of accounting packages, or fixed M&E allocations.

‍

Building on stakeholder inputs and lessons learned from existing funds as well as other sectors, our 4-page primer on this topic offers a concise overview of challenges and opportunities and outlines recommendations for negotiators, policymakers, global funds, and other actors to enhance local-level access and strengthen inclusive, participatory, and transparent funding processes.

‍

Find the full publication here.

‍