Climate mainstreaming via national climate funds: the experiences of Bangladesh and Ethiopia

Abstract

A number of countries have established national climate funds to finance climate actions. This paper explores how these funds help to mainstream climate change and examines the barriers they encounter in the process. The analytical framework uses a process-based understanding of policy integration to examine how financial incentives are able to support climate mainstreaming. Methodologically, this paper examines the experience of the Bangladesh Climate Change Resilience Fund and Ethiopia's Climate Resilient Green Economy Facility. Policymakers, officials related to the funds, and other stakeholders were interviewed. This paper finds that national climate funds sought to achieve mainstreaming by engaging with sectoral ministries. Such engagement was expected to lead to changes in sectoral and system-wide policy goals and instruments. The three main approaches for sectoral engagement were: serving as implementing entities, participating in fund governance, and via in-house climate change units. The findings underscore how finance received by the funds shapes programming, how the lack of detailed plans limit the ability of policies to pull in the finance desired, and the inconsistent role played by climate change units. A disaggregated approach to climate mainstreaming allows us to identify where and how financial incentives can be useful.