Emerging economies are discovering that a Whole of Government Approach (WOGA), coupled with a Country Platform for Climate Action (CPCA), can be the key to unlocking climate finance.
On November 15, 2022, at the G20 Leaders’ Summit in Bali, in a move that turned heads in the global investment community, Indonesia secured $20 billion in climate finance through its Just Energy Transition Partnership (JETP). This wasn’t just about the money – it’s a testament to the power of a unified government approach to climate change and a well-structured platform for attracting investment.
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As climate challenges intensify, countries are finding that traditional, siloed efforts fall short. Enter the Whole of Government Approach (WOGA) and the Country Platform for Climate Action (CPCA) – two interlinked strategies reshaping how emerging markets and developing economies (EMDEs) tackle climate change and court international investors.
The WOGA recognises that climate change touches every aspect of governance, necessitating coordination across the “Four Corners” of climate policy: Foreign Affairs & Geopolitics, the Energy/Infrastructure & Industrial Sectors, the Environmental & Nature Sectors, and the Economy & Finance Sectors.
In Foreign Affairs, countries like Brazil are leveraging climate diplomacy to secure international support for Amazon preservation. On the Energy front, India’s ambitious solar projects demonstrate how cross-sector collaboration can drive renewable energy adoption. Environmental initiatives, such as Costa Rica’s Payments for Ecosystem Services programme, showcase innovative approaches to conservation that require multi-ministry cooperation.
Meanwhile, in the economic sphere, Nigeria’s Sustainable Banking Principles – which are being updated at this moment – illustrate how domestic financial regulations can align with international climate goals to attract private sector investment.
The intersection of these corners is where the real magic happens. For instance, Vietnam’s recent success in attracting green investment stems from its ability to align diplomatic efforts, energy sector reforms, environmental commitments, and financial incentives into a coherent package.
This should come as no surprise. Developed economies have already demonstrated the power of WOGA in crafting transformative climate policies. The United States Inflation Reduction Act (IRA) is a prime example of coordinating efforts across energy, finance, and environmental sectors. With $369 billion allocated for climate and clean energy initiatives, the IRA is projected to reduce US emissions by 40 percent by 2030. The European Union’s Carbon Border Adjustment Mechanism (CBAM) similarly showcases WOGA in action. This policy, born from coordination between trade, environment, and industry sectors, aims to prevent carbon leakage and level the playing field for EU producers. As it’s phased in from 2023 to 2026, CBAM is set to reshape global trade patterns in carbon-intensive industries.
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China’s National VI-b Emission Standard for vehicles is another testament to WOGA’s effectiveness. This stringent standard, resulting from close collaboration between environmental regulators and the auto industry, is pushing Chinese manufacturers to the forefront of electric vehicle technology.
For EMDEs, the WOGA offers significant advantages. When a government is seen to speak with one voice on climate issues, it significantly reduces perceived risks. This coordinated approach can improve policy coherence and boost investor confidence, crucial for attracting much-needed climate finance.
Ebipere Clark, as managing partner, leads Frontier-Alpha LLP, a policy advisory firm specialising in infrastructure and financing, with an emphasis on sustainability, climate and digital solutions.
