International Climate Finance

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 climate change.

Climate Finance Issues to Watch Ahead of COP28

This blog lays out four key issues related to International climate finance that will be highlighted at COP28.


Climate Finance Landscape Analysis: Themes and Trends

This landscape analysis of international climate finance is a concise overview of selected main actors and initiatives addressing climate finance flows as well as suggested emerging themes and trends.

What is international climate finance?

While there is no singular definition of climate finance, the Standing Committee on Finance (SCF) under the United Nations Framework Convention on Climate Change (UNFCCC) describes it as finance that is aimed at:

  1. reducing emissions of greenhouse gases
  2. reducing vulnerability or increase resilience to negative climate change impacts.   

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.  

UNFCCC Finance Negotiations

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. This perspective stems from Article 9 of the Paris Agreement, which states 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.”  

Developed countries formally provide these resources, including in the context of a pledge to provide at least $100 billion per year by 2020 to climate financing facilities like the Green Climate Fund. While developed countries have increased their annual climate finance funding, they have yet to reach the $100 billion goal.  

The New Collective Quantified Goal

An even larger goal, known as the New Collective Quantified Goal (NCQG) on climate finance, is due to be adopted at COP29. In accordance with Article 9, paragraph 3 of the Paris Agreement, the NCQG must take into account the needs of developing countries when determining the new goal. While estimations can vary slightly, it’s broadly understood that vulnerable country needs exceed several trillion dollars annually to meet their climate goals.  

 A 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 – the so-called ‘shifting of the trillions’. 

About C2ES’s work on international climate finance

As work to mobilize capital and finance accelerates and the world’s response to climate change grows more pressing, C2ES aims to: 

  • assess the long-term climate finance landscape 
  • inform international climate finance negotiations and policy 
  • provide options for ambitious and practical finance outcomes in the context of the UNFCCC. 

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