Canada's international climate finance

 

Supporting ambitious climate action abroad

Developing countries, particularly the poorest and most vulnerable, are the hardest hit by climate change. Many have limited capacity to prevent and cope with the consequences of climate change, like severe weather, drought and flooding.

The COVID-19 pandemic has taught us that global problems require global solutions, and, now more than ever, we must come together. Recovery efforts bring opportunities to accelerate the transition to renewable energy, reorient business and finance toward sustainable development and reconsider our relationship with nature.

Transformational financial investments are needed to help communities around the world better address climate change and adapt to its harmful consequences. International climate finance plays a key role in achieving this. Developed countries made a commitment to mobilize $100 billion USD each year in international climate finance to developing countries and small island states between 2020 and 2025.

Recognizing that climate change is a global challenge that requires global solutions, Canada accepted an invitation by the United Kingdom’s COP26 President to co-lead a process, alongside Germany, to further build trust that developed countries stand by their commitments and deliver on the USD 100 billion climate finance goal through 2025.

On October 25, 2021, Canada and Germany, in collaboration with the United Kingdom, released the Climate Finance Delivery Plan that, based on analysis from the Organisation for Economic Co-operation and Development (OECD) of recent climate finance pledges and historical levels of climate finance, shows a positive trend with the US$100 billion goal being within reach in 2022 and with confidence that it would be met in 2023.

At the 2021 G7 Leaders’ Summit, Canada announced a doubling of its international climate finance commitment, to $5.3 billion over the next five years. This commitment supports developing countries to combat climate change, while striving to address biodiversity loss around the world. It will particularly help low and middle-income countries already affected by climate change to transition to sustainable, low-carbon, climate-resilient, nature-positive and inclusive development. This commitment will build on the successes of Canada’s $2.65 billion commitment (2015-2021).

At the 26th United Nations Climate Change Conference of the Parties (COP26) in Glasgow, United Kingdom, Canada provided further details on how its $5.3 billion climate finance commitment will support developing countries as they adapt to climate change and transition to a cleaner economy.

In addition to increasing its provision of grants to 40 per cent, up from 30 per cent previously, Canada will also increase its provision of funding towards adaptation to a minimum of 40 per cent to help developing countries build resilience to climate change impacts. 

Canada’s increased commitment to climate finance recognizes that urgent action is needed to address the interconnected crises of climate change and biodiversity loss, which disproportionally affect the poorest and most vulnerable. As such, Canada will allocate at least 20 percent of its $5.3 billion climate finance commitment to projects that leverage nature-based solutions and projects that contribute biodiversity co benefits in developing countries. This represents more than CA$1 billion.

Canada will also continue supporting the transition to clean energy and the phasing-out of coal through significant investments over the next five years, most notably through its contribution of up to $1 billion to the Climate Investment Funds Accelerated Coal Transition Program.

Across its climate finance commitment, Canada will ensure that 80% of projects integrate gender equality considerations, in line with its Feminist International Assistance Policy.

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