The Need for a Climate-Resilient Development-Aligned Framing of Innovative Climate Finance

The increasing recognition of the importance of climate-resilient development (CRD) for developing countries is accompanied by a further recognition of the need for financial resources to meet the need for adaptation, mitigation and sustainable development in these countries. Innovative finance sources and mechanisms are therefore recommended as a solution for scaling up climate finance to meet CRD needs in developing countries. This review article examines the alignment between innovative climate finance and CRD. It argues that the operationalisation of innovative climate finance generates misalignments with CRD principles particularly relating to how the finance is sourced, governed and allocated. This fails to align with CRD principles of ensuring transformations and transitions, equity and justice and agency and empowerment. The review article proposes an expanded and CRD-aligned understanding of innovative climate finance that improves the governance of existing climate finance flows.