International Climate Change Financing: The Climate Investment Funds (CIF) [March 1, 2012] [open pdf - 330KB]
"The United States contributes funding to various international financial institutions to assist developing countries to address global climate change and other environmental concerns. Congress is responsible for several activities in this regard, including (1) authorizing periodic appropriations for U.S. financial contributions to the institutions, and (2) overseeing U.S. involvement in the programs. Issues of congressional interest include the overall development assistance strategy of the United States, U.S. leadership in global environmental and economic affairs, and U.S. commercial interests in trade and investment. This report provides an overview of two of the larger and more recently instituted international financial institutions for the environment--the Climate Investment Funds (CIF)--and analyzes their structure, funding, and objectives in light of the many challenges within the contemporary landscape of global environmental finance. The CIF are investment programs administered by the World Bank Group that aim to help finance developing countries' transitions toward low-carbon and climate-resilient development. […] Proponents of the CIF point to several factors in support of the funds, including an innovative programmatic design, a country-led investment process, and a balanced governance structure with enhanced stakeholder engagement. Proponents of the multilateral development banks' (MDBs') role in environmental assistance emphasize several advantages to financing climate programs through the World Bank Group, including its commitment to private sector development, its capacity to leverage large cofinancing arrangements, and its possession of fiduciary standards and institutional expertise. However, critics highlight several factors of concern with the CIF and their Trustee, including a lack of transparency, coordination, and 'polluter pay' responsibilities; a potential for new conditionalities, additionalities, and increased debt burdens on developing countries; and a prior economic development policy at the World Bank that is considered a conflict of interest for environmental protection."
CRS Report for Congress, R41302