The international community has agreed to scale up the flow of climate finance to developing countries and increase transparency in the fulfillment of these commitments. Such transparency requires an internationally agreed-upon framework for the measurement, reporting and verification (MRV) of climate finance, with common metrics and methodologies that do not yet exist. The complex web of funds and sources raises particular challenges in this regard.
This report aims to contribute to efforts to formulate an international framework in four key ways:
- By developing a conceptual framework for MRV of climate finance;
- By presenting a summary of current approaches to MRV of climate finance within EU Member States;
- By mapping current practices to track private climate finance, which is more complex than tracking public finance;
- By proposing options for improving MRV at the international level.
To improve measurement, the report suggests developing guidance – preferably through the United Nations Framework Convention on Climate Change (UNFCCC) – on how to define and account for climate finance, using the Rio Markers as a first step.
To improve reporting, the authors suggest presenting data in a consistent format within National Communications, and expanding coverage to ensure it is sufficient.
To improve verification, the report recommends providing opportunities for informal verification to supplement the formal UNFCCC process; this can increase the effectiveness of the system by bringing greater and more diverse resources to bear on the problem.
In this context, the authors find that the EU can play an important role in improving MRV of climate finance by sharing best practices, developing guidelines which can inform the international system, and potentially by using the Monitoring Mechanism Decision (MMD) to harmonize EU practice.
Download the report (external link to EU website)