Sectoral Guidance for Tracking Green Finance

The guide establishes a standardized framework for tracking climate mitigation, adaptation, and biodiversity finance. It provides detailed lists of eligible activities for mitigation, a three-step validation process for adaptation, and specific criteria for biodiversity finance. The document emphasizes the use of ex-ante GHG emission reduction assessments and offers methodologies for quantifying finance through incremental or proportional approaches to ensure transparency and avoid double-counting.

• The energy sector is a primary target for mitigation, with an estimated annual climate finance requirement of USD 3 trillion between now and 2030, and a current investment gap of USD 2.5 trillion per year.
• Mitigation in the energy sector is categorized into 13 eligible activities, including renewable energy generation, lower-carbon energy generation (such as low-carbon hydrogen), energy efficiency, and the reduction of fugitive emissions.
• The transport sector is projected to become the primary source of global GHG emissions by 2035, contributing 46% of emissions, and up to 80% by 2050.
• Transport mitigation finance focuses on 11 eligible activities, emphasizing modal shifts from higher-carbon to lower-carbon modes, such as shifting freight or passengers from road or air to rail and waterways.
• Water sector mitigation focuses on eight eligible activities, including energy-efficiency improvements in water supply systems and the reduction of methane or nitrous oxide emissions from wastewater management.
• The AFOLU and fisheries sector has a significant mitigation potential, estimated at 8-14 gtCO2e per year from 2020-2050, primarily through the conservation and restoration of forests and ecosystems.
• Urban mitigation is specifically detailed for the buildings and solid waste management sectors, with buildings responsible for 37% of global energy-related GHG emissions.
• Adaptation finance is validated through a three-step process: demonstrating a context of vulnerability via a robust evidence base, establishing an explicit statement of intent to reduce that vulnerability, and proving a clear and direct link between the project activities and the reduction of vulnerability.
• Adaptation activities are classified into three types to determine quantification: Type 1 (Adapted activities) and Type 2 (Shared objectives) receive less than 100% of total activity costs, while Type 3 (Primary objective) activities are counted at 100%.
• Biodiversity finance can be quantified using an incremental approach (summing exact budget items) or a proportional approach (applying a coefficient to the total budget based on project objectives or activity types).

APA

Stout, S., Alberti, C., Miao, G., Abraham, S., Strinati, C., Padmanabhi, R., & Petsinaris, F. (2024). Sectoral Guidance for Tracking Green Finance. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/11/IDFC-Sectoral-Guidance-for-Tracking-Green-Finance.pdf

Chicago

Stout, Sean, Caroline Alberti, Gaoyi Miao, Sasha Abraham, Costanza Strinati, Rajashree Padmanabhi, and Foivos Petsinaris. Sectoral Guidance for Tracking Green Finance. Climate Policy Initiative, 2024. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/11/IDFC-Sectoral-Guidance-for-Tracking-Green-Finance.pdf.

Wikipedia

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BibTeX

@techreport{stout2024sectoral, author = {Stout, Sean and Alberti, Caroline and Miao, Gaoyi and Abraham, Sasha and Strinati, Costanza and Padmanabhi, Rajashree and Petsinaris, Foivos}, title = {{Sectoral Guidance for Tracking Green Finance}}, institution = {Climate Policy Initiative}, year = {2024}, month = oct, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2024/11/IDFC-Sectoral-Guidance-for-Tracking-Green-Finance.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }