International climate financing

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International climate financing is a key instrument for supporting countries of the Global South (developing countries and emerging economies) in the fight against the climate crisis.

The legal basis for this support by industrialised countries can be found in Article 4 of the United Nations Framework Convention on Climate Change (UNFCCC) and in Article 9 of the Paris Agreement. The specific implementation of these provisions will be revised in the international climate negotiations.

There are two basic forms of international climate financing. In multilateral climate financing, states make contributions to international funds such as the Green Climate Fund (GCF), the Adaptation Fund (AF) or the Fund for Responding to Loss and Damage (FRLD). These funds, in turn, invest in programmes and projects for climate protection, adaptation to the unavoidable consequences of climate change and/or related losses and damage in the countries most affected by the climate crisis.

In bilateral climate financing, contributing countries implement programmes and projects in the respective partner country directly - in consultation with a partner country.

Both forms can be found in Austrian programmes and projects for international climate financing. In addition to government grants, international climate finance includes loans from development banks, public-private partnerships and climate-friendly grants and investments from the private sector.

With the decision of the Baku Climate Change Conference (COP 29, November 2024), the signatory states agreed to provide at least USD 300 billion annually for climate change mitigation and adaptation by 2035. Although the traditional donor countries will continue to provide the majority of climate financing, economically strong emerging countries are also being encouraged for the first time to make financial contributions on a voluntary basis. The broadening of the definition of donor countries is also supported by the intention to include - also on a voluntary basis - all funds processed and mobilised via multilateral development banks (regardless of whether the capital originates from an industrialised or emerging country).

Austria is committed to this new climate financing target and to making an appropriate contribution to it. The funds can come from a variety of sources - public, private, bilateral, multilateral and alternative sources.

According to a resolution of the Glasgow Climate Change Conference (COP 26, November 2021), the amount for adaptation to unavoidable consequences of climate change in climate financing is to be doubled by 2025 (compared to 2019).

Against this background, Austria developed the strategy for international climate financing (climate financing strategy), which has now been revised and was adopted by the Council of Ministers in November 2024.

In addition to taking into account the results of the climate conferences, the new strategy also propagates a whole-of-government approach that addresses the intensive discussions on the implementation of Article 2.1c of the Paris Agreement (establishing the consistency of all financial flows with the mitigation and adaptation goal of the Agreement) as well as the growing importance of private climate financing and green budgeting.

The central aim of the strategy is to clarify Austria's contribution to long-term climate financing as well as contributions from private and alternative sources. The strategy creates a framework to ensure that Austria fulfils future legal obligations of international climate finance as effectively, efficiently, transparently and coherently as possible with national measures.

In line with the mandate from the strategy, the International Climate Finance Working Group (AGIK), chaired by the BMK (Federal Ministry for Climate Action, Environment, Innovation and Technology, now BMLUK, Federal Ministry of Agriculture and Forestry, Climate and Environmental Protection, Regions and Water Management) and comprising representatives of other Ministries and government institutions involved, the Federal Provinces, the social partners and the civil society, is available as a platform for coordination and information exchange.

In agreement with the BMF (Federal Ministry of Finance) and the BMEIA (Federal Ministry of European and International Affairs), guidelines were drawn up for bilateral projects in the BMK's international climate financing. In particular, these guidelines contain provisions on ecological, economic, social and development policy criteria.

Report

In accordance with the climate financing strategy, an annual report on Austria's international climate financing must be submitted.

Note: Unfortunately, the current report is presently not barrier-free!

Austrian climate financing strategy and guidelines

Note: Unfortunately, the current strategy is presently not barrier-free!

Detailed information on individual projects

Information on international climate finance (in English)