More than 190 countries are gathering in Copenhagen from December 7-18, 2009, to decide on the next significant steps to avoid the catastrophic impacts of climate change. To achieve this goal, one of the things that the international community must negotiate is targets for new, significant, predictable, and stable finance to support developing countries’ transition to low-carbon economies. A significant amount of these resources will be raised from public sources in developed countries and invested in developing countries, and will be managed by one or more international institutions.

While much of the energy so far has been on securing commitments from countries to contribute financial resources to the global effort to combat climate change, it is important how these commitments are managed. To do this effectively, the parties in Copenhagen should consider resources and management simultaneously.

The magnitude of the financial flows, the challenge of getting the institutional architecture right, and the pressing need to use these resources efficiently and effectively, raise two significant questions:

1. How will these funds be collected, distributed, and accounted for at the international level?
2. What mechanisms are needed to ensure that recipient countries manage these funds in ways that are transparent and responsive to the needs and input of the public?

This brief seeks to address these questions based on an examination of existing and proposed climate change finance mechanisms and the findings of the International Budget Partnership’s Open Budget Survey 2008.