Towards the end of July in Addis Ababa, Ethiopia, UN members clinched an agreement updating the rules on development finance, aligning these flows with broader economic, social, and environmental priorities. The meeting covered development funding issues related to macroeconomic, financial, trade, investment tax, and monetary policies. The conference coincided with the recent creation of two large development banks including the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank; a global economy still recovering from financial crisis; and the finalisation of a set of new Sustainable Development Goals (SDGs) in separate talks at UN headquarters in New York.

The Addis gathering – dubbed the Third International Conference on Financing for Development (FfD3) – kicked off a series of important UN summits, including the adoption of the post-2015 development agenda later this month, as well as the pivotal UN Framework Convention on Climate Change (UNFCCC) negotiations due to be held in December. Moreover, while countries aim to achieve many of the SDGs by 2030, progress against these goals also has repercussions well beyond that timescale. The preamble of the Addis outcome document recognises the need to preserve the planet “for our children and future generations.”

However, while it is difficult to prioritise among such a comprehensive list of urgent global challenges, arguably none of the individual SDGs has such far-reaching implications as the goal on climate change. Climate change not only threatens to impede further development, it could also reverse decades of development progress. In the face of climate change, countries’ economies, living conditions, ecosystems, and basic functioning will be at stake. Does the Addis outcome fully take into account the urgency of climate action? Does it support the necessary scale up of climate finance critical to future sustainable development?

Available at: http://www.ictsd.org/bridges-news/biores/news/financing-for-development-under-a-changing-climate