Financing climate change solutions
Financing climate change solutions is concerned with the process of making finances available for projects geared towards climate change mitigation and adaptation. However, it is imperative to understand the difference between funding and financing for climate change solutions. Funding refers to money gotten from federal grants, state grants, local revenue and philanthropic sources which will not be repaid while financing sources for climate change solutions refers to money gotten from sources like government financing and private financing which will be repaid. Funding sources are usually in silos and piecemeal which does not fit-in together to create a comprehensive adaptation and mitigation solution.
The process of allocation of grants to fund projects is usually very competitive. This means that a lot of resources will be spent on the application process and most of the applications do not win the grants. The implication is that grant-applicants with fewer resources and less financial strength are at a competitive disadvantage.
Also, financing climate change solutions is technically difficult to leverage upon because of the expertise required to access the finance and the challenge of paying back the money sometime in the future. Because of all these challenges, stakeholders must think deeply on how to combine funding and financing to solve different pieces of the climate change adaptation and mitigation challenge. Domestic public finance, international public finance, market mechanisms and other innovative finance sources should be explored.