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The Climate Investment Funds (CIFs)
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March 9, 2015
Mutilateral Environmental Assistance
Many governments believe that environmental degradation
and climate change pose international and trans-boundary
risks to human populations, economies, and ecosystems that
could result in a worsening of poverty, social tensions, and
political stability. To confront these global challenges,
countries have negotiated various international agreements
to protect the environment, reduce pollution, conserve
natural resources, and promote sustainable growth. While
some observers call upon industrialized countries to take
the lead in addressing these issues, there is recognition that
efforts are unlikely to be sufficient without similar
measures being implemented in developing countries.
However, developing countries, which tend to be focused
on poverty reduction and economic growth, may not have
the financial resources, technological know-how, and/or
institutional capacity to deploy such measures on their own.
Therefore, international development assistance has been a
principal method for governments to support developing
country action on global environmental problems.
The United States and other industrialized countries have
committed to providing financial assistance for
environmental initiatives through a variety of multilateral
agreements (e.g., the Montreal Protocol [1987], the U.N.
Framework Convention on Climate Change [1992], and the
U.N. Convention to Combat Desertification [1994]).
International financial assistance takes many forms, from
fiscal transfers to market transactions, and includes official
development assistance, contributions to multilateral
development banks (MDBs) and other international
financial institutions, export credits, loan guarantees,
insurance products, and foreign direct investment.
Background
In February 2008, Japan, the United Kingdom, and the
United States announced their intention to create a set of
funds at the MDBs to help developing countries bridge the
gap between dirty and clean energy and boost the World
Bank's ability to help developing countries tackle climate
change (Henry Paulson, et al., Financial Bridge from
Dirty to Clean, Financial Times, February 7, 2008). The
World Bank held the first design meeting for the proposed
Climate Investment Funds (CIFs) in March 2008 in Paris,
France. Two subsequent meetings were held in
Washington, DC, and Potsdam, Germany, and on May 23,
2008, representatives from 40 developing and industrialized
countries reached agreement on the funds' design and
duration. (The CIFs were programmed to sunset upon the
commencement of the Green Climate Fund in the U.N.
Framework Convention on Climate Change [UNFCCC].)
The Climate Investment Funds
Since 2008, the CIFs have provided 63 developing and
middle income countries with financial resources to
mitigate and manage the challenges of climate change and
reduce their greenhouse gas emissions. The CIFs are
composed of two separate trust funds-the Clean
Technology Fund (CTF) and the Strategic Climate Fund
(SCF)-each with a specific scope, objective, and
governing body. Overall, 14 contributor countries have
pledged $7.6 billion to the funds since September 2008.
The contributions are expected to leverage an additional
$57 billion from other sources (e.g., MDBs, financial
intermediaries, and the private sector). For a full description
of purpose and programs, see the CIFs website at
http://www.climateinvestmentfunds.org/cif/.
Organizational Structure
The CIFs are implemented through a partnership of the
MDBs and governed by representatives from both the
contributor and recipient countries. The role of governance
for the CIFs is to approve investment plans, programming,
and the allocation of financial resources and to provide
guidance, performance evaluation, and reporting. It is
further tasked with ensuring that the strategic orientation of
the CIFs is guided by the principles of the UNFCCC. The
organizational structure of the CIFs is balanced between
contributor and developing countries. All decisions are
made by consensus. Other international organizations, the
private sector, and civil society representatives are included
as observers. All observer roles are active, allowing them
to take the floor, propose agenda items, and recommend
experts but not to vote. The governance structure of the
CIFs includes the following: a Trust Fund Committee, an
MDB Committee, a Partnership Forum, an Administrative
Unit, and the Trustee (the World Bank).
Funding
The United States pledged $2 billion to the CIFs in 2008.
All U.S. funding is subject to annual congressional
appropriations, and payments are made by the U.S.
Treasury to the World Bank as trustee for the CIFs.
Appropriations have varied widely over the years, largely
reflecting budget trends. Through fiscal year (FY) 2015, the
United States has contributed approximately $1.77 billion
to the CIFs. The Administration's FY2016 budget request
includes $170.7 million for the CTF and $59.6 million for
the SCF. If appropriated, this request would fulfill the
United States' 2008 pledge. See Table 1 for a summary of
U.S. contributions to the CIFs.
www.crs.gov 17-57D(](ViewImageLocal?handle=hein.crs/crsuntaaggs0001&div=1&collection=&method=preview&ext=.png&size=3)