Climate finance accountability and think tanks in the Global South: six opportunities 

29 August 2023

As the Africa Climate Summit begins next month, we examine how think tanks in the Global South are helping to hold those responsible for climate finance to account.  

We conducted a rapid review of think tanks working on climate finance in Africa and South Asia as part of the OTT Research Support Service. We found that many think tanks are interested in pursuing this agenda, but they lack funding and expertise to conduct the necessary regular and rigorous monitoring of national climate finance budgets and expenditure. 

In this blog, we present what we learned about their efforts, the opportunities for think tanks in the Global South to support climate finance accountability, and what think tanks need to continue and scale this important work.

Why climate finance accountability matters

Climate finance comes from diverse sources – local, national, transnational, public and private. + Multilateral development banks and public finance actors are particularly important climate fund mobilisers, with OECD reporting that out of USD 83.3 billion in climate finance, 82% was attributed to multilateral and bilateral public finance.

COP15 (Copenhagen, 2009) estimated that developing countries needed USD 100 billion per year by 2020 to pursue climate action. This projection was upheld in COP 21 (Paris, 2016) with the timeline extended to 2025.

This target was always going to be an arduous one. 

Even if they did reach the reported USD 83.3 billion, Oxfam argues that countries are not properly accounting for their contributions to climate finance. If they did, contributions would be in the region of USD 21 to USD 24.5 billion, compared to the projected USD 4.3 trillion per year needed.

This calls into question demand-side accountability mechanisms and actors. The global architecture for climate finance requires reforms

As countries in the Global South reel under the post-pandemic debt distress, further questions emerge around climate finance and the trade off with investing in pro-recovery and growth sustaining interventions.

We argue that think tanks in the Global South have a major role to play here.

Do you need or want us to conduct a rapid research study like this one? Get in touch with OTT’s Research Support Service. 

Six ways think tanks in Africa and South Asia are tackling climate finance – and opportunities to deepen this work

We reviewed 67 finance, economic and development think tanks in Africa and South Asia, out of which 20 are actively engaged in climate finance, with a concentration in Ghana, Nigeria, Senegal, Pakistan, and India. + Their main areas of focus are climate finance knowledge management and policy/regulatory issues. 

Beyond the inherent urgency of climate change, these think tanks are motivated by changing donor priorities, funding opportunities, and alignment with contemporary development issues. However, they encounter challenges like funding limitations, regulatory constraints, limited access to credible data, and limited public awareness, which all impede their ability to deepen and scale their work. 

We identified six ways in which think tanks are tackling climate finance, highlighting some examples, gap and opportunities:

1. Supporting  robust policy and regulatory frameworks

Policy and regulatory frameworks lay the foundation and guiding principles for assessing climate finance objectives, impact, and pathways. Think tanks aid in developing and implementing robust climate policies at national and local levels, advocating for integrating climate into sectors like energy, agriculture, and transportation, and strengthening governance structures and institutions to effectively address climate finance challenges. 

Notably, the Centre for Policy Research has made high-level contributions to the UN-IPCC Working Group 3 and examined institutions and governance necessary for low-carbon development, informing India’s climate resilience goals and Finance Commission priorities.

2. Informing international climate negotiations

These negotiations shape commitments of global actors, affecting national and subnational pledges. The involvement of Global South think tanks is limited in these negotiations, impacting potential partnerships between governments and non-government entities in climate finance. Opening the door to participation can enhance transparency, accountability, and climate diplomacy, fostering international cooperation on climate finance. 

The Natural Resource Governance Institute, Africa Centre for Energy Policy, and the Centre for Policy Dialogue work both independently and collaboratively to showcase a collective think tank perspective on the Global South’s expectations from international negotiations, using COP 27 as an example.

3. Evaluating climate finance mechanisms and instruments

Climate finance instruments, whether debt, equity, credit enhancement, and risk transfer, are as good as the investment environment and the monitoring mechanisms to ensure optimal results for Global South countries and, ultimately, climate mitigation. 

Global South think tanks are evaluating the effectiveness and efficiency of these instruments, researching existing instruments, and proposing innovative instruments to support climate-smart investments. 

For instance, the Centre for Policy Dialogue proposes blended finance for Bangladesh, while the Centre for Energy Finance explores India’s energy transition leveraging international bond markets. The Environmental Economics Policy Forum in Ethiopia highlights carbon pricing as a mechanism for funding inclusive green transition through greenhouse gas pricing and pushes for new climate investment models.

4. Promoting transparency and accountability

Ensuring transparency and accountability in climate finance flows and decisions is crucial for unlocking adaptation and mitigation gains in the Global South. This is necessary to combat greenwashing, promises of ‘fake solutions’, and discrepancies like the USD 24 billion vs. the reported USD 83 billion out of USD 100 billion target.

Curiously, not many Global South think tanks are involved in transparency and accountability. This appears to be influenced by limited donor appetite. This means that much of the research is pro bono rather than a systematic effort to monitor transparency and accountability at national and global levels. The Africa Centre for Energy Policy, along with IMANI-Africa, Tax Justice Network Africa, and Africa Policy Research Institute (APRI), stands out in advocating for transparency in the run up to CoP27

5. Navigating information asymmetry on climate finance

Demand-side accountability is ineffective in the absence of information. A crucial opportunity lies in addressing this gap in the Global South by providing technical assistance and capacity building  to governments, local civil society organisations, and think tanks in Africa. 

Strengthening their grasp of climate finance mechanisms, policies, initiatives, and accountability is key. Peer learning for best practices is critical, as the scale of the challenge demands intensified efforts across numerous Global South countries. 

Using ‘watchdogs’ to monitor fiscal policy commitments at the national level and aid fiscal policy actors in accounting for climate expenditures is critical. A similar approach, supported by think tanks, can extend to overseeing global climate finance commitments. 

Engagement across platforms for knowledge generation is imperative at the national level, and replicating these efforts within sub-national government structures, with the help of think tanks and community-based organisations to guarantee inclusivity and success of these efforts.

6. Research, analysis and knowledge sharing

Current efforts mainly revolve around research and analysis of climate finance governance, policies, and their efficacy (focused on sustainability, debt, SDGs, and Just Energy Transition). Effective policy influence through evidence necessitates broad collaboration and aligned partnerships for research and advocacy. 

Overemphasis on research report publication, divorced from its integration into relevant discourse, weakens climate finance mainstreaming efforts in Global South policymaking. To foster engagement, research outputs must resonate with stakeholders’ needs. 

The Africa Policy Research Institute’s needs assessment for financial resources in West Africa highlights valuable insights into knowledge generation and sharing. Scaling and impact of such endeavours require substantial support.

We are seeing increased recognition for the need to hold governments to account for their climate finance commitments. Think tanks are producing technical papers on better fiscal policy instruments, blended finance, grant-based multilateral climate finance, and climate finance tools. We are supporting Southern actors to influence international climate engagements, like the COP. But think tanks cannot be effective without the necessary resources – technical, financial and information. Donors must keep investing and supporting climate finance think tanks if these efforts are to be scaled significantly in the Global South.

This article shares findings from a study conducted by OTT’s Research Support Service, offering quality, relevant and timely research services to support busy organisations with strategic and day-to-day decision making.
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We used the Open Think Tank Directory to identify relevant think tanks. Check to see if your think tank is registered.