Evidence review on market-based approaches to mitigation and adaptation - an approach paper

Effective involvement of the private sector is key for closing financing gaps and enhancing climate action. Of the multilateral climate funds, the GCF has the strongest private sector focus and houses a private sector facility that enables it to finance private sector mitigation and adaptation activities directly and indirectly at the national, regional and international levels, in particular local actors, including small- and medium-sized enterprises and local financial intermediaries. This evidence review is a comprehensive and rigorous collation, assessment, and presentation of causal evidence presented solely in existing systematic reviews on key market-based approaches: payments for environmental services, willingness-to-pay assessments, insurance products and results-based payment modalities. The synthesis will summarise the existing evidence based on the following two evaluation questions: To what extent have selected market-based approaches relevant to mitigation and adaptation been effective at achieving desired outcomes in developing countries? What factors influence the effectiveness and efficiency of these market-based approaches in developing countries?