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1 1 (April 24, 2023)

handle is hein.crs/govelkc0001 and id is 1 raw text is: S ICongressional Research Service Informning Ih legisIative cI ba e since 1914 U.S. International Climate Finance: A Primer lnternational Environmnental Assistance Many governments hold that environmental degradation and climate change pose international and transboundary risks to human populations, economies, and ecosystems. To confront these challenges, governments have negotiated various international agreements to protect the environment, reduce pollution, conserve natural resources, and promote sustainable growth. While some governments and some observers call upon higher-income countries to take the lead in addressing these issues, many recognize that such efforts are unlikely to be sufficient without similar measures being taken in lower-income countries. However, lower-income countries, which face poverty and economic growth challenges, may not have the financial resources, technological know-how, and/or institutional capacity to deploy environmentally protective measures on their own. Therefore, international financial assistance, or foreign aid, has been one method for higher-income governments to support actions on global environmental problems in lower-income countries. Often, this assistance can serve as a cost-effective strategy for donor countries to provide greater market access abroad for their environmental goods and services while providing increased environmental benefits at home. The United States and other higher-income countries have committed to providing financial assistance for global environmental initiatives through a variety of international agreements, including, among others, the Montreal Protocol (1987), the United Nations Framework Convention on Climate Change (UNFCCC, 1992), and the U.N. Convention to Combat Desertification (1994). International financial assistance takes many forms, from fiscal transfers to market transactions. It may include grants, loans, loan guarantees, export credits, insurance products, and private- sector investment. It may be structured as official bilateral development assistance or as contributions to multilateral development banks and other international financial institutions and environmental funds. Ultimately, U.S. government assistance to lower-income countries for environmental initiatives is determined by Congress. Congressional committees of jurisdiction include, but are not limited to, the House Committees on Foreign Affairs, Financial Services, and Appropriations and the Senate Committees on Foreign Relations, and Appropriations. Climate Finance Under the UNFCCC The UNFCCC is the principal international treaty to acknowledge and address human-driven climate change. The United States ratified the treaty in 1992 (U.S. Treaty Number: 102-38). Updated April 24, 2023 Among the obligations outlined in Article 4 of the Convention, higher-income Parties (i.e., those listed in Annex II of the Convention, which were members of the Organisation for Economic Co-operation and Development in 1992) committed themselves to provide unspecified amounts of new and additional financial resources to assist developing-country Parties (not specified in the text) in meeting the full cost of their reporting requirements and the full incremental cost of implementing greenhouse gas reduction and adaptation measures under the Convention. Further, the implementation of these commitments shall take into account the need for adequacy and predictability in the flow of funds and the importance of appropriate burden sharing among the developed country Parties. Over the past several decades, the United States has delivered financial and technical assistance for climate change activities in the developing world through a variety of bilateral and multilateral programs. U.S.-sponsored bilateral assistance has come through programs at the U.S. Agency for International Development, the U.S. State Department, the Millennium Challenge Corporation, the Export-Import Bank, and the International Development Finance Corporation, among others. U.S.-sponsored multilateral assistance has come through contributions by the U.S. Departments of State and the Treasury to environmental funds at various international financial institutions and organizations such as the Global Environment Facility (GEF), the Green Climate Fund (GCF), the U.N. Development Program, the U.N. Environment Program, the UNFCCC's Special Climate Change Fund and Least Developed Country Fund, and the World Bank's Climate Investment Funds, among others. Each channel has its own mission and particular capacities. Global Environment Facility The GEF was established in 1991 as an independent international financial institution to provide grants, promote cooperation, and foster actions in lower-income countries to protect the global environment. The GEF subsequently became an official operating entity of the financial mechanism of several international environmental agreements, including the UNFCCC. The GEF is structured to provide grant-based financing to cover the additional or incremental costs associated with transforming projects with national development benefits into ones with global environmental benefits. GEF partners with international institutions, nongovernmental organizations, and the private sector to assist lower-income countries with environmental projects related to six areas: biodiversity, climate change, international waters, the stratospheric ozone layer, land degradation, and persistent organic pollutants.

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