Reducing emissions while adapting to a changing climate will require trillions of dollars in climate finance and investment. This is particularly critical for developing countries and those most vulnerable to climate change.
Reducing emissions while adapting to a changing climate will require trillions of dollars in climate finance and investment. This is particularly critical for developing countries and those most vulnerable to climate change.
While there is no single definition of climate finance, the Standing Committee on Finance (SCF) under the United Nations Framework Convention on Climate Change (UNFCCC) describes it as finance aimed at:
International climate finance refers to transnational financing needed to enable mitigation and adaptation initiatives, particularly in countries with fewer resources. Estimates of the funds required to meet this growing need are great, reaching several trillion dollars annually.
Within the context of the Paris Agreement, international climate finance is often described as financial assistance from richer countries to those less endowed and more vulnerable to the adverse impacts of climate change.
Article 9 of the Paris Agreement states, among other things, that: “developed country Parties shall provide financial resources to assist developing country Parties with respect to both mitigation and adaptation in continuation of their existing obligations under the convention.” It also notes that “as part of a global effort, developed countries should continue to take the lead in mobilizing climate finance.”
Another key aim of the Paris Agreement, Article 2.1(c), is to make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.
In 2009, developed countries pledged to provide at least $100 billion per year in climate finance to developing countries by 2020. This goal was later extended to 2025.
At COP29, countries adopted the New Collective Quantified Goal (NCQG) on climate finance in effect replacing the previous $100 billion goal. The NCQG features multiple targets and initiatives, including, among other things:
Finance for adaptation projects—those that help to reduce the risks and harms from climate hazards—has continually lagged behind mitigation financing.
In the Glasgow Climate Pact agreed at COP26, developed nations were urged to at least double the provision of adaptation finance from 2019 levels by 2025.
At COP30, as part of the Global Mutirão decision, Parties agreed to at least triple adaptation finance by 2035.
As work to mobilize capital and finance accelerates and the world’s response to climate change grows more pressing, C2ES aims to: