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Financing Climate Change Mitigation and Adaptation Role of Regional Financing Arrangements

The financing needs of climate change mitigation and adaptation are uncertain and large. In response, an extensive architecture of financing for climate change mitigation and adaptation has started to develop around the world. Is there a role for a regional approach in this developing financing architecture? This paper examines the issue in the context of the Asia and Pacific region. The paper argues that, while climate change is a global public good, it has strong regional features, and, consequently, regional institutions and financing arrangements play an important role. In particular, regional financing arrangements have a special role in climate change adaptation. Regional financing arrangements complement and strengthen the global collective action on climate change. They should be treated as essential elements of the overall strategy for fighting climate change globally, and be supported accordingly. Moving ahead, a first priority should be to scale up and expand existing regional financing arrangements. Another important priority is to create specialized regional funds to address key region-specific climate change adaptation needs. Finally, opportunities for private sector financing in a regional setting should be promoted through appropriate policy and regulatory support.