Supporting the Momentum of Paris: A Systems Approach to Accelerating Climate Finance

This synthesis paper by the Climate Policy Initiative proposes a systems thinking approach to optimize international public climate finance. It identifies systemic barriers in developing countries—such as short-termism in banking and capital volatility—and argues that international public actors must shift from a project-finance focus to a financial system development focus to effectively leverage private capital and meet Nationally Determined Contributions (NDCs).

• Developing country financial systems are characterized by a dominance of banks with short-term lending outlooks and high systemic risks. Between 2010 and 2012, 49% of loans had a tenor of less than one year, and only 19% of loans in developing countries exceeded five years in duration, compared to 33% in high-income countries.
• The primary barriers to the growth of climate finance include limited access to finance, the high cost and unsuitable nature of current financial products, and a lack of tools and methods for implementing low-carbon and climate-resilient projects. Domestic political and policy risks are also significant hurdles for private finance solutions.
• International public finance actors are often constrained by perceived trade-offs between their mandates for poverty alleviation, general development, and climate change, which leads to siloed budgets and organizational structures. Additionally, some bilateral development banks are viewed as over-prudent in their risk ratios when leveraging capital.
• There is a critical need for international public actors to shift their focus from individual project finance toward broader financial system development. This includes supporting new regulatory actions for banks, increasing ESG risk disclosure from service providers, and establishing new mandates for green debt and equity investments.
• A significant gap exists in concessional finance access for middle-income countries. Of 21 emerging market countries analyzed by the IFC with a combined USD 23 trillion investment opportunity, only five have access to the World Bank's International Development Association (IDA) concessional finance, leaving 16 countries to rely on project-level multilateral climate funds.
• The report advocates for the use of systems thinking—including actor mapping, causal loop diagramming, and social network analysis—to identify leverage points and bottlenecks in the climate finance system. This approach helps actors visualize their roles and coordinate more effectively to avoid duplication of efforts.
• New development finance institutions, specifically the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB), offer opportunities to increase the scope of renewable energy coverage due to their large initial authorized capital (approximately USD 100 billion each) and focus on large infrastructure projects.
• The Green Climate Fund (GCF) is the largest multilateral climate fund by total committed assets, with over USD 10.3 billion in commitments. Half of these commitments have been directed toward transregional projects or projects in Sub-Saharan Africa and Latin America.

APA

Oliver, P., Tonkonogy, B., Wang, D., & Wang, X. (2018). Supporting the Momentum of Paris: A Systems Approach to Accelerating Climate Finance. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2018/03/180306-Systems_Approach_to_Climate_Finance-Synthesis.pdf

Chicago

Oliver, Padraig, Bella Tonkonogy, David Wang, and Xueying Wang. Supporting the Momentum of Paris: A Systems Approach to Accelerating Climate Finance. Climate Policy Initiative, 2018. https://www.climatepolicyinitiative.org/wp-content/uploads/2018/03/180306-Systems_Approach_to_Climate_Finance-Synthesis.pdf.

Wikipedia

{{cite report |last1=Oliver |first1=Padraig |last2=Tonkonogy |first2=Bella |last3=Wang |first3=David |last4=Wang |first4=Xueying |title=Supporting the Momentum of Paris: A Systems Approach to Accelerating Climate Finance |publisher=Climate Policy Initiative |date=March 2018 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2018/03/180306-Systems_Approach_to_Climate_Finance-Synthesis.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{oliver2018supporting, author = {Oliver, Padraig and Tonkonogy, Bella and Wang, David and Wang, Xueying}, title = {{Supporting the Momentum of Paris: A Systems Approach to Accelerating Climate Finance}}, institution = {Climate Policy Initiative}, year = {2018}, month = mar, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2018/03/180306-Systems_Approach_to_Climate_Finance-Synthesis.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }