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Financing for Sustainable Development:

Aaron Etteridge, Paul Steele

Discussion paper, 9 pages

This paper examines the question of how practically we might achieve greater alignment between the use of development and climate finance, and sets out steps towards an integrated sustainable development financing framework. It thus links closely to discussions around creating synergies between the agendas of the Monterrey and Rio processes, and many of the issues discussed are in fact relevant for other flows of international finance, including those under the Rio Conventions on Biodiversity and on Desertification as well as for disaster risk reduction and environmental themes such as sustainable land management. The paper focuses largely on international public finance, however the approach to integration and coherence applies equally to other sources of finance, including both domestic and international sources.

The paper first briefly describes the current development and climate finance delivery channels and some of the concerns about lack of effectiveness, including some of the political economy challenges that exist and need to be acknowledged. It then elaborates some principles which might be used to guide the design of an international sustainable development financing framework, incorporating finance for development and for climate change. It emphasizes the importance of allocating finance through country systems for national social and economic development planning and budgeting, and also a need among funders and developing countries to shift from sectoral planning and budgeting to more integrated, sustainable development planning and budgeting. Finally, the paper presents some of the opportunities for refor

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