Developed countries are to provide climate finance to developing countries to assist them to implement the objectives of the United Nations Framework Convention on Climate Change (UNFCCC), according to the principle of ‘common but differentiated responsibility and respective capabilities’ set out in the convention.

In the 2009 Copenhagen Accord, the EU among other developed nations committed to mobilising USD 100 billion per year by 2020 in climate finance. Tracking the flow of this financial support is essential to achieve this target. The EEA supports the European Commission in keeping track of Member States’ climate contributions to recipient countries, annual updates of which are provided at each Conference of the Parties.

What the data are telling us

  • The total climate finance reported by the Member States continues to increase annually, keeping in sight the target of USD 100 billion.
  • In terms of the distribution of support, mitigation accounts for the largest share of the activities. Support for cross-cutting and adaptation activities has been slowly increasing over the last few years.
  • As in previous years, the breakdown of the financial flows by sector shows that a significant share of the EU climate finance in 2020 is allocated to unspecified sectors. Of the specified sectors, energy generation, distribution and efficiency received the highest allocation of climate finance, and agriculture the lowest.
  • The data differentiate the channels through which financial support is provided: bilateral, multilateral, regional and other channels. They are also disaggregated by financial instrument, showing that over the years the largest share of climate finance is provided in the form of grants.

Reporting on climate finance is the cornerstone of the transparency framework under the Paris Agreement. Member States report on their climate finance contributions to developing countries under the UNFCCC in their national communications and biennial reports. Until September 2020, Member States were required to submit reports covering their financial flows for the previous calendar year under Article 16 of the EU Monitoring Mechanism Regulation via the European Environment Information and Observation Network (Eionet) [LINK] central data repository Reportnet[LINK] website.

In 2021, Member States report for the first time under the new Governance Regulation (EU) 2018/1999, which sets the basis for reporting on financial and technology support provided to developing countries and Reportnet 3. The implementing provisions of the new Regulation require Member States to report private support mobilised through public interventions in a structured and transparent way, as well as reporting grant equivalents of financial instruments. Despite this, there is scope to further increase the transparency of the data in terms of the consistency of reporting and comparability across Member States.