A central element of bringing developed and developing countries together in an international climate change agreement will be financing to assist developing countries in their transition to climate-resilient and low-carbon economies.

Financing under a new long-term global climate change agreement, to be finalised by 2015, should support concerted efforts by all countries to achieve a strong environmental outcome. From Australia's perspective this means global emissions reductions to limit average global temperature rise to below 2 degrees Celsius.

It is in Australia's interest to assist developing countries to build their capacity to reduce emissions and to take urgent adaptation actions while maintaining a priority focus on development, in particular the eradication of poverty. Early action on both adaptation and mitigation will reduce global costs and the costs to individual countries. To this end, Australia is working to build a coordinated approach that will deliver financing where it is needed most, as soon as possible.

Fast-start finance

Australia is providing A$599 million over three years to assist in addressing the urgent and immediate needs of developing countries that are particularly vulnerable to climate change.

What is fast-start finance?

Fast-start finance refers to the collective commitment agreed by donor countries (in the Copenhagen Accord in 2009 and Cancún Agreements in 2010) to provide new and additional resources approaching US$30 billion over the period 2010-2012 (for Australia FY2010/11 – FY2012/13) to developing countries. This finance will support a range of actions to reduce carbon emissions (mitigation), enhance technology development and capacity building, and help developing countries adapt to the effects of climate change (adaptation).

Developed countries contributing to fast-start finance include Australia, Canada, the countries of the European Union, Iceland, Japan, Liechtenstein, New Zealand, Norway, Switzerland and the United States.

Upon invitation from the UNFCCC Secretariat, developed countries provide information on the allocation and disbursement of their funding in May of each year (over the fast-start period), ensuring transparency. Australia has provided its first official report to the secretariat of the UNFCCC, which included the 2010 report. For a copy of this report see below.

The Dutch Government has also created a website which provides details of contributors and recipients to fast-start finance. See: Fast Start Finance

What does Australia's fast-start finance contribution look like?

Australia announced its contribution of A$599 million in June 2010. Details of the package were jointly announced by the Hon. Greg Combet AM MP, Minister for Climate Change and Energy Efficiency, and the Hon. Kevin Rudd MP, Minister for Foreign Affairs, in Cancún, Mexico in late 2010.

Australia's fast-start finance is jointly administered by the Department of Climate Change and Energy Efficiency and AusAID.

Australia's fast-start finance contribution is:

  • Grants-based.
  • Balanced between adaptation (52 per cent) and mitigation (48 per cent) measures.
  • Strongly focused on countries most vulnerable to the effects of climate change, with small island developing states (SIDS) receiving around one third of funding and least developed countries (LDCs) receiving approximately one quarter.
  • Drawn from a growing aid budget – it does not displace funding from existing aid programs.

Australia's fast-start finance contribution of A$599 million, is broadly broken down as follows:

  • A$248 million to the International Climate Change Adaptation Initiative to support adaptation efforts.
  • A$146 million to the International Forest Carbon Initiative to assist developing countries reduce emissions from reducing deforestation and forest degradation in developing countries, known at REDD+.
  • A$131 million to multilateral agencies to assist developing countries in their mitigation and adaptation efforts.
  • A$38 million delivered through the climate change component of Australia's contribution to the fifth replenishment of the Global Environment Facility (GEF).
  • A$36 million to other climate change activities in developing countries, including $15 million to 'Climate Change Partnerships for Development'.

For more information on specific fast-start activities see Australia's progress reporting below.

Where is Australia's fast-start finance going?

Australia's fast-start finance is flowing to the following developing countries.

Australia's global fast-start finance

Fast-start finance of A$599 millon

  • 52% to adaptation
  • 24% to REDD+ (mitigation)
  • 24% to other mitigation

Bilateral funding

  • Bangladesh
  • Cambodia
  • Cook Islands
  • East Timor
  • Federated States of Micronesia
  • Fiji
  • Indonesia
  • Kiribati
  • Nauru
  • Niue
  • Palau
  • Republic of Marshall Islands
  • Samoa
  • South Africa
  • Sri Lanka
  • Tokelau
  • Tonga
  • Tuvalu
  • Vanuatu
  • Vietnam

Regional funding

  • Afghanistan
  • Antigua and Barbuda
  • Barbados
  • Belize
  • Cape Verde
  • Comoros
  • Cuba
  • Dominica
  • Domnican Republic
  • East and Horn of Africa region*
  • Grenada
  • Guinea Bissau
  • Guyana
  • Haiti
  • India
  • Jamaica
  • Laos
  • Maldives
  • Maritius
  • Nepal
  • Pakistan
  • Sao Tome and Principe
  • Seychelles
  • Southwestern Africa region*
  • St Kitts and Nevis
  • St Lucia
  • St Vincent and Grenadines
  • Suriname
  • Trinidad and Tobago
  • West Africa region*

*Australia's Africa regional funding is currently being programmed with further details to be released in future reports.

Please note that this map shows direct bilateral and regional finance flows only. It does not include multilateral finance flows. For more information regarding Australia's multilateral finance flows, please refer to Australia's fast-start reports listed below.

Want to know more about Australia's fast-start finance?

Australia provides regular reporting on fast-start finance. In May 2011, Australia provided its first official report to the Secretariat of the UNFCCC. In addition, Australia has undertaken to provide update reports at each meeting of the Conference of the Parties to the UNFCCC throughout the fast-start finance period.

A copy of Australia's most recent fast-start finance report, released at the 17th session of the Conference of the Parties (COP 17) in Durban, South Africa, is below:

For information regarding Australia's previous fast-start reports see:

Progress since Copenhagen

At the 2009 UN Climate Change Conference in Copenhagen, developed countries committed to a goal of jointly mobilising US$100 billion per year by 2020 from a wide variety of sources – public, private, bilateral and multilateral, including alternative sources – in the context of meaningful mitigation actions by developing countries and transparency on implementation. This commitment, inscribed in the Copenhagen Accord, was reaffirmed in the Cancun Agreements and again at the most recent UN Climate Change Conference in Durban in 2011.

Since then, the international community has pursued work on several fronts to identify ways of scaling-up climate change financing to meet that long-term financing goal. In 2010, the United Nations Secretary-General formed a High-Level Advisory Group on Climate Change Financing (AGF) which examined potential sources of climate change financing to meet the long-term goal. The AGF report forms a valuable technical input and continues to inform work on long-term finance in the climate change negotiations. Australia supported the participation of the Hon Bob McMullan MP, former Parliamentary Secretary for International Development, in the AGF in his personal and expert capacity.

G20 discussions on sources of climate finance are ongoing. In April 2011, G20 Finance Ministers tasked the World Bank, with regional development banks and the International Monetary Fund (IMF), to conduct further analysis on the options considered in the AGF report. The G20 report was discussed at the Finance Ministers' Meeting in October 2011 and the Leaders' Summit in November 2011. Australia expects discussions to continue in 2012.

At the Durban Conference, countries agreed to pursue work on long-term finance in the UNFCCC, with the creation of a work programme. This work programme will be aimed at contributing to ongoing efforts to scale up the mobilisation of climate finance after 2012, when fast-start finance will draw to a close. The work programme will include analysis of options from a wide variety of sources and will draw on previous analysis, including the AGF report and the G20 report. It will also take into account lessons learned from the fast-start finance period.

Australia is committed to continuing to provide ongoing support to developing countries, delivering its fair share of the agreed long-term financing goal. To meet the scale of financing required, all sources of finance—public and private, domestic and international—will be needed. Leveraging public funding to unlock private investment will enable climate finance to be harnessed at the scale required to meet future challenges. Over time, well-functioning carbon markets are expected to provide the majority of support for global actions to reduce emissions.

Australia continues to work with other countries in the G20, all Parties to the UNFCCC and relevant other international fora to progress work on mobilising long-term financing for climate change.

Green Climate Fund

At Cancún in December 2010, countries agreed to establish a new Green Climate Fund to support mitigation and adaptation activities in developing countries, including capacity-building, technology development and transfer. Australia anticipates that, over time, a significant portion of long-term financing to support climate change activities in developing countries will be channeled through this Fund.

Throughout 2011 Australia joined 39 other countries on the Transitional Committee which was tasked with the design of the Fund. The Transitional Committee's recommendations, including the draft governing instrument of the Green Climate Fund, were approved by the Conference of the Parties to the UNFCCC in December 2011 at Durban.

As a result, concrete steps are now being taken to operationalise the Fund to ensure the appropriate arrangements are put in place so it can commence operations including allocating funds to support action on climate change in developing countries as soon as possible. Australia, like other developed countries, is providing some financial assistance to support the initial administrative operations of the Fund.

Related information

Australia regularly makes submissions to the United Nations Framework Convention on Climate Change (UNFCCC). These submissions outline the Government's views on issues that are important to international climate change negotiations.

View Australia's submissions to the UNFCCC.