Lattanzio Analyst in Environmental Policy
States contributes funding to various international financial institutions to
assist developing countries to address global climate change and other
environmental concerns. Congress is responsible for several activities in
this regard, including (1) authorizing periodic appropriations for U.S.
financial contributions to the institutions, and (2) overseeing U.S. involvement
in the programs. Issues of congressional interest include the overall
development assistance strategy of the United States, U.S. leadership in
global environmental and economic affairs, and U.S. commercial interests
in trade and investment. This report provides an overview of two of the
larger and more recently instituted international financial institutions for
the environment—the Climate Investment Funds (CIF)—and analyzes their
structure, funding, and objectives in light of the many challenges within
the contemporary landscape of global environmental finance.
The CIF are investment programs administered by the World Bank Group that aim
to help finance developing countries’ transitions toward low-carbon and
climate-resilient development. Formally approved by the World Bank’s Board
of Directors on July 1, 2008, the CIF are composed of two trust funds—the
Clean Technology Fund (CTF) and the Strategic Climate Fund (SCF)—each with
a specific scope, objective, and governance structure. The CTF provides
financing for demonstrating, deploying, and diffusing low-carbon
technologies that have the potential for longterm avoidance of greenhouse
gas emissions. The SCF—a suite of three separate funds, including the
Pilot Program for Climate Resilience (PPCR), the Forest Investment Program
(FIP), and the Scaling Up Renewable Energy Program in Low Income Countries
(SREP)—supports the least developed countries in their efforts to achieve
low-carbon, climate-resilient development. Overall, donor countries have
pledged $6.5 billion to the funds since September 2008 in support of programs
in 45 developing countries. The U.S. pledge totals $2 billion. For FY2010,
Congress approved $375 million for the CIF (the Consolidated
Appropriations Act, 2010, H.R. 3288; P.L. 111-117); for FY2011, Congress
approved $234.5 million (the Department of Defense and Full- Year Continuing
Appropriations Act, 2011, H.R. 1473; P.L. 112-10); and for FY2012, Congress approved
$234.5 million (the Consolidated Appropriations Act, 2012, H.R. 2055; P.L.
112-74). For FY2013, the Administration has requested $235 million for the
The CIF are just one set of financial mechanisms in a larger network of
international programs designed to address the global environment.
Accordingly, their effectiveness depends on how the trust funds address
programmatic issues, build upon national investment plans, react to recent developments
in the financial landscape, and respond to emerging opportunities. Proponents
of the CIF point to several factors in support of the funds, including an
innovative programmatic design, a country-led investment process, and a
balanced governance structure with enhanced stakeholder engagement.
Proponents of the multilateral development banks’ (MDBs’) role in environmental
assistance emphasize several advantages to financing climate programs through the
World Bank Group, including its commitment to private sector development, its
capacity to leverage large cofinancing arrangements, and its possession of
fiduciary standards and institutional expertise. However, critics
highlight several factors of concern with the CIF and their Trustee,
including a lack of transparency, coordination, and “polluter pay”
responsibilities; a potential for new conditionalities, additionalities,
and increased debt burdens on developing countries; and a prior economic
development policy at the World Bank that is considered a conflict of
interest for environmental protection.
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