With the rapid ratification of the Paris Agreement, international climate funds will be important in scaling up developing countries climate action. Evidence shows climate finance reaching the local level – as part of a coherent approach to climate action – delivers effective, efficient and sustainable results that enhance the impact of each dollar disbursed. This working paper explores the flows of climate finance within the main international climate funds, to understand how effective they are in getting finance to the local level and what design features enable or prevent local financing. It distils lessons from development funds that are experienced in local financing. It concludes by highlighting the ways in which local climate financing can be enhanced – to further improve the effectiveness of aid.
