Unlocking climate finance for social protection: an analysis of the Green Climate Fund

Social protection has gained increasing attention in global climate policy due to its potential to contribute to low-carbon, just and climate-resilient development. Unlocking climate finance for social protection is critical to realize this potential. Multilateral climate funds established under the United Nations Framework Convention on Climate Change (UNFCCC) can play a particularly important role by financing social sectors where private investments are not attractive. Yet, there is a distinct policy and research gap in understanding the potential and limitations of the UNFCCC financial mechanisms to support social protection in low- and middle-income countries. Taking as a case study the Green Climate Fund (GCF), which is the largest multilateral fund under the financial mechanism of the UNFCCC, we seek to address this gap. First, the study introduces a framework for analysis of the ways climate finance engages with social protection by looking into a comprehensive set of formal social services and transfers provided by the state to individuals, households, and on a collective basis. Second, the study identifies a continuum of entry points for integrating social protection into the GCF’s project portfolio and offers a holistic perspective by capturing climate change mitigation, adaptation and loss and damage. We find that social protection can be instrumental in the design and implementation of GCF projects. In addition, our analysis reveals that the GCF has the potential to support projects that create enabling conditions for integrating climate change considerations into national social protection systems, and that aim at piloting or establishing long-term social protection mechanisms with climate change objectives.