Mobilising Finance for Environmental Priorities: Recommendations for the Future

This paper argues that the sustained provision of adequate financial resources for the environment is a prerequisite for addressing environmental challenges in Eastern Europe, the Caucasus and Central Asia (EECCA) and South-Eastern Europe (SEE). It sets out options for how optimal use could be made of the various available sources of environmental finance, including domestic public expenditure, private sector participation and official development assistance. Recommendations are provided for Ministers on priority actions for ensuring that financial resources are made available for the environment. EECCA and SEE governments need to continue to prioritise the environment in policy and public expenditure frameworks, and make better use of incentive-based instruments. They also need to create a suitable climate for the private sector to participate in environmental financing. The international community must ensure that IFI loans for environmental investments are more accessible, especially for low-income countries, including by providing adequate grant co-financing. Finally, EECCA and SEE countries should strengthen their capacity to prepare environmental investment projects, with effective support from IFIs and donors.