Who determines transformational change in development and climate finance?

Summary

The language of transformational change is increasingly applied to climate policy, and particularly in climate finance. Transformational change in this context is used with respect to low-carbon development futures, with the emphasis on mitigation and GHG metrics. But, for many developing countries, climate policy is embedded in a larger context of sustainable development objectives, defined through a national process. Viewed thus, there is a potential tension between mitigation-focused transformation and nationally driven sustainable development. We explore this tension in the context of operationalizing the Green Climate Fund (GCF), which has to deal with the fundamental tension between country ownership and transformational change. In relation to climate finance, acceptance of diverse interpretations of transformation are essential conditions for avoiding risk of transformational change becoming a conditionality on development. We further draw lessons from climate governance and the development aid literature. The article examines how in the case of both the Clean Development Mechanism and Nationally Appropriate Mitigation Actions, there has been limited success in achieving both development objectives and ‘nationally appropriate’ mitigation. The development aid literature points to process-based approaches as a possible alternative, but there are limitations to this approach.