CLiFT Briefing #1 September 2023

Published: 08 September 2023

This briefing provides an overview of the climate finance architecture and the intersections between the multilateral climate regime and the international financial architecture.

Key Messages

• Climate finance is a key legal, policy, and operational plank of the multilateral climate change regime; it is central to meeting international legal climate obligations and driving policy and operational change locally, transnationally, and globally.
• Developed countries are primarily responsible for providing finance and taking the lead on mobilising finance from a variety of sources and channels. Asymmetries in the governance of the global financial system also means that they predominantly set the regulatory and policy design resulting in regulatory fragmentation which is likely to impede coordinated climate action.
• Climate finance is embedded in and delivered through international financial architecture (IFA) but realigning the global financial system to meet international climate targets is and will remain challenging due to the structural characteristics of the IFA.
• Realigning the global financial system to meet climate targets must also include alignment of its governance and regulatory structures to the principles of the multilateral climate regime, including greater voice, representation and equity, transparency and accountability.
• Asymmetries in the governance of the global financial system mean that regulatory and policy design is predominantly set by developed countries; regulatory fragmentation in the IFA is likely to impede coordinated climate action.

This briefing was authored by:

• Professor Celine Tan, Professor of International Economic Law, Warwick Law School, University of Warwick, UK

Authors