Canada’s approach to international climate finance
Adaptation support to the poorest and most vulnerable
One of the key objectives of Canada’s climate finance is to provide increased adaptation support to the poorest and most vulnerable countries. Adaptation is a key aspect of the Paris Agreement and Canada is committed to continuing efforts to scale up adaptation finance. Adaptation funding supports transition to low-emission and climate-resilient economies.
Least Developed Countries (LDCs) and Small Islands Developing States (SIDS) face several human and institutional capacity and resource constraints, which affect their ability to adapt to climate change. Canada works closely with LDCs and SIDS on adaptation via bilateral initiatives and multilateral contributions.
Canada is providing $30 million to respond to the urgent adaptation needs of developing countries through the Least Developed Countries Fund (LDCF). The LDCF supported a project in Malawi to help new weather stations deliver accurate and precise information, helping farmers build resilience against the impact of climate change. More than 5 million people in 11 districts will benefit from the project.
Reduction of GHG emissions for climate change mitigation
Canada’s climate finance supports projects that reduce greenhouse gases (GHG) emissions and encourage low carbon and sustainable growth. Canada supports developing countries’ needs and priorities for reducing their GHG emissions for ambitious climate change mitigation.
Canada provided $60 million to establish the Renewable Energy in Small Island Developing State Program, which support the planning and construction of renewable energy infrastructure, energy efficiency and battery storage solutions.
Mobilization of private-sector capital for climate action
Canada is mobilizing private-sector capital for climate action. Public finance alone will not meet the level of investment needed to address climate change. The private sector plays an important role in reaching the investment levels required to create low-carbon and climate-resilient communities. There is significant potential for investment in climate solutions by the private sector. We are working with multilateral development banks and bilateral partners to help remove barriers to private investment. By working together with these institutions, we are helping to:
- reduce technical and financial risks of climate-related investment;
- advance innovative finance modalities to boost investment in sustainable infrastructure;
- demonstrate the commercial viability of projects and unlock future private investments in similar initiatives; and
- scale up climate investments and accelerate innovative approaches for climate action.
Canada recently announced an additional $200 million in funding to a second phase of the Canadian Climate Fund for the Private Sector in Asia at the Asian Development Bank. This fund aims to catalyze private climate investment in developing Asian and Pacific countries. Through this fund, Canada is providing $30 million to support the construction and operation of a 72MW wind power project and four solar power projects with a total capacity of 42MW in remote areas in eastern Indonesia. This will be the first utility-scale solar project development by the private sector in Indonesia. This project alone will mobilize an additional $115 million from other public and private sources.
Support to UNFCCC institutions and mechanisms
Canada also supports UNFCCC institutions and financial mechanisms. They play an important role in global action on climate change. The UNFCCC works with developing and developed countries to deliver climate funding and implement the Paris Agreement. Canada contributes significant funding to climate programs through the UNFCCC, such as the Green Climate Fund (GCF) and the Global Environment Facility (GEF).
Canada is providing $300M to the GCF, the largest dedicated international climate fund, helping developing countries to reduce their GHG emissions and adapt to the impacts of climate change.
Canada continues to support GEF’s action on climate change in developing countries. The GEF is a key source of funding and a catalyst for action on the environment.
Alignment with the Sustainable Development Goals
Canada’s climate finance investments contributes to the 2030 Agenda for Sustainable Development and to the Sustainable Development Goals including Goal 13 – Climate Action. This initiative is a global call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030. The well-being of developing countries is often linked to the state of the natural environment and the opportunities it offers. Climate change contributes to – and often worsens – other development challenges, such as:
- economic growth
- gender equality
Gender equality considerations
In addition to these five core elements, we are also ensuring that our climate investments are in-line with our international development goals, such as promoting gender equality and empowering all women and girls. Environment and climate action is an action area of Canada’s Feminist International Assistance Policy. Canada’s contributions include efforts to:
- ensure that climate-related planning, policymaking and financing address the particular needs and challenges of women and girls;
- support employment and business opportunities for women in the renewable energy sector;
- strengthen women’s economic empowerment in areas such as climate-smart agriculture.
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