Environmental and Climate Financing
GIZ has many years of experience in advising on environmental and climate financing and supports its partners in designing national financial flows in a sustainable way as well as in opening up international sources of financing.
From an economic perspective, a stable climate and an unimpaired environment are global public goods that have positive effects on the economy and society. The fact is, however, that the stability of these public goods is no longer given due to the effects of the megatrends of recent decades - globalization, urbanization, industrialization, biodiversity loss, climate change - and their environmental services are no longer sufficiently available to the human population. International agreements on environmental and climate protection are intended to counteract this development. However, the financial resources for implementing international environmental and climate goals through necessary transformations of the economic, social and financial systems are limited and must therefore be used in a goal-oriented and efficient way.
At present, there is a lack of appropriate investment and market structures to transform economic systems and shift capital to environmentally and climate friendly projects (e. g., an appropriate carbon pricing). Advice on environmental and climate funding therefore aims to green private and public financial flows to reduce greenhouse gas emissions and to finance adaptation to the impacts of climate change.
GIZ has many years of experience in advising on environmental and climate financing and supports its partners in designing national financial flows in a sustainable way as well as in opening up international sources of financing. The focus of the consultancy is on the design and establishment of cooperation and governance structures and dialogue formats that lead to informed financing and investment decisions and ensure efficient and transparent planning and implementation of environmental and climate funding (climate governance). GIZ's advisory services also include the further development of national climate finance strategies, such as financing plans for the implementation of Nationally Determined Contributions (NDCs) and National Adaptation Plans (NAPs).
GIZ's services in the area of environmental and climate funding include the following key areas:
- Advise on green financial market reforms that provide a framework to direct investments into climate mitigation and adaptation through taxonomies, presentation standards, clear rules, and incentives.
- Advising partner governments on how to design their financial policies in an environmentally and climate-friendly way, for example on reducing subsidies that are harmful to the climate and the environment, as well as on the introduction and organization of eco-taxes and CO² pricing, and on promoting “green budgeting”.
- Advising public financial institutions and commercial climate investors on developing and scaling sustainable financial products, such as green loans and bonds, to promote investment in climate and environmentally friendly projects and the management of climate risks.
- Advise on strengthening financial and insurance knowledge and awareness of the benefits of climate risk insurance, and on piloting new climate risk insurance models and products.
- Provide technical and administrative advice on the implementation of climate financing facilities (e. g., NAMA Facility).