Finance for climate action in developing countries is widely agreed to be an essential element of a post-2012 climate agreement, and a key factor in negotiating such finance will be ‘Direct Access’ (DA). This paper explores the DA concept, examining its challenges and merits, by discussing existing funds that have adopted this modality. Whilst DA is an efficient and effective means of delivering financial support to developing countries, it cannot of itself guarantee inclusivity or engagement with the most vulnerable. Civil society participation and empowerment, multi-stakeholder engagement, and a bottom-up approach are crucial elements in developing a comprehensive DA climate financing model.
Developing countries have become increasingly confident in demanding more control of the monies they are due, equitable representation in voting structures, and swift and easy access to climate finance. It is increasingly clear that climate finance cannot be governed in the same way as in the past.
There are only two concrete examples of DA in practice: the Global Fund to Fight Aids, Tuberculosis and Malaria, which has used the DA modality since 2002, and the Kyoto Protocol Adaptation Fund (AF), which has adopted it as one of two modalities. There is no established ‘best practice’ for DA, and there has been little opportunity within the United Nations Framework Convention on Climate Change (UNFCCC) to explore important issues relating to the detail of DA, which policymakers must now consider.
- DA can provide for more efficient and effective delivery of financial support to developing countries than indirect access modalities. DA can enhance alignment with national needs and priorities, encourage climate action prioritisation, promote a more balanced partnership between contributors and recipients, streamline access, and reduce the flow of arbitrary finance.
- DA has the capacity to facilitate climate action plans that are inclusive, deliver for the most vulnerable and enhance co-benefits. In particular, Southern civil society and community-based organisations should participate in the more bottom-up approach underpinning DA, ensuring they can safeguard their interests, harness their knowledge and skills, and ensure delivery of pro-poor outcomes.
- Parties to the UNFCCC have not yet thoroughly discussed and clarified proposals for DA within ongoing negotiations, and still need to further explore, understand and explicitly endorse inclusive national decision-making under DA modalities. Not all countries are yet persuaded of the value of stakeholder engagement in reducing the political, social and economic risks associated with climate projects and programmes, and in building national and local capacity and resilience.
The participation and empowerment of civil society within climate finance modalities is crucial; the multiple interests involved in climate change, action and finance require checks and balances against dominating powers, ensuring the needs and concerns of poor and marginalised communities are not over-ridden. Further policy recommendations for implementing DA climate financing under the post-2012 agreement are to:
- Institutionalise effective multi-stakeholder participation, coordination and accountability in DA. This involves agreeing international guidelines on stakeholder participation at all levels, supporting a multi-stakeholder coordination entity at national level, and ensuring adequate resourcing for the accountability function of stakeholders. In addition, all financial information, project proposals, monitoring information and board decisions should be published online, and support provided to ensure the availability of documents in local languages.
- Agree a DA model that promotes integrated climate adaptation and mitigation planning, and that ensures accountability to international human rights and social and environmental standards.
- Agree to establish an independent international ombudsperson, and international fiduciary standards for implementing agencies eligible for DA financing, building on those agreed by the AF Board.
- Agree on including provision for multilateral implementing entities to be invited to provide support where needed.
