Aligning climate and sustainable development finance through an SDG lens. The role of development assistance in implementing the Paris Agreement

Highlights

• Climate-relevant Official Development Assistance (ODA) contributes to multiple SDGs.

• Climate-relevant ODA and recipient countries’ climate action priorities are broadly correlated.

• Recipients’ and donors’ climate priorities alignment has not improved after the Paris Agreement.

• Donor’s balance between mitigation and adaptation became more aligned to that of recipients.

Abstract

Climate change and development are strongly interconnected. An efficient use of financial resources would, thus require alignment between climate finance and development priorities, as set out in the context of both the Paris Agreement and the 2030 Agenda for Sustainable Development. In this paper, we investigate to what extent climate-related official development assistance (ODA) before and after the Paris Agreement adoption supports the implementation of the Sustainable Development Goals (SDGs). Moreover, we assess to what extent donors align this finance with recipient countries’ climate-related priorities as spelled out in their Nationally Determined Contributions (NDCs). First, we find that climate-relevant ODA contributes to multiple SDGs, above all SDG 7 (energy) and SDG 11 (cities). Second, we find that there is substantial alignment between donors’ and recipients’ SDG priorities, but that this alignment has not improved in recent years, since the conclusion of the Paris Agreement. Third, we find that albeit climate-finance continues to be allocated more to climate-change mitigation than to adaptation, the difference became smaller in recent years. This reduced the misalignment with recipient countries’ NDC climate activities, which focus more on adaptation than mitigation. Overall, we identify coherence, gaps and opportunities for further alignment of climate and development actions, and related finance. Such an alignment is essential to increase the likelihood of implementation of the two international agreements and to ensure that action is guided by recipient countries’ needs.