Global Climate Financing of Multilateral Development Banks - An Analysis

  • Dhulasi Birundha Varadarajan Emeritus Professor, Senior Fellow, ICSSR, New Delhi and Senior Professor, Former Chairperson, Head, Department of Environmental Economics, School of Economics, Madurai Kamaraj University, Madurai, Tamil Nadu, India
  • M Chitra Assistant Professor, Department of Econometrics, School of Economics, Madurai Kamaraj University, Madurai, Tamil Nadu, India
Keywords: Climate Finance, Adaptation, Mitigation, Co2 emissions, Stability Analysis


The human Community in earth understood theemergency need to integrate forces to avert dangerous climate change. This requires mobilising financial resources from a wide range of sources, public and private, bilateral and multilateral, including alternative sources. This makes it increasingly important to track and report financial flows that support climate change mitigation and adaptation to create trust and accountability with regard to climate related investment. Climate Financing by Multilateral Development Banks (MDBs) comprising the African Development Bank (AFDB) the Asian Development Bank (ADB) the European Bank for Reconstruction and Development (EBRD) the European investment Bank (EIB) the inter-American Development Bank Group (IDBG) the world Bank (WB) and the International Finance Corporation (IFC). The vision of Paris agreement’s in financial flows consistent with low greenhouse gas emissions and climate- resilient development plays a significant role in the MDBs work to improve tracking and reporting. At COP 24 in December 2018 the MDBs reinforced their commitment to combating climate change presenting joint approach that will align their activities with the goals of the internationalagreement. Based on the increasing role of MDB Banks in Climate Financing to different regions and sectors this paper focuses on the objectives such as To study climate Financing of Multilateral Banks and its role in minimising global CO2 emissions, To find the share of Adaptation Financeto total climate finance and also to determine the share of different banks in total adaptation funding. Based on the share, the moving pattern of financing by each group of banks would be analysed, to study the share of adaptation finance to total investments of funds in different sectors. The moving pattern of financing in different regions and sectors would also be observed. In order to study the variations in total amount allotted, amount for adaptation and amount on mitigation, Bank wise, Region wise and sector wise would be analysed. Data are collected from secondary sources for the years 2011 to 2018 from the reports of Multilateral Development joint report on climate finance. Regression was used to study the variation in variables such as total climate finance given by MDBs, Finance to Adaptation and Mitigation, Region wise financial distribution and sector wise allocation. The result of the study found that MDB banks are more innovative enough to distribute climate finance to various regions and to various sectors by pooling finance from various sources. Finance is given to countries to implement Adaptation and Mitigation measures separately. Comparatively finance to Adaptation is less to Mitigation. To utilize the Climate Finance more effectively MDB banks have to follow the approach of synthesizing both Adaptation finance and Mitigation Finance.

How to Cite
Birundha Varadarajan, D., & Chitra, M. (2022). Global Climate Financing of Multilateral Development Banks - An Analysis. Shanlax International Journal of Economics, 10(2), 64-77.