Approaches to Meeting the Paris Agreement Goals

This report by the Climate Policy Initiative (CPI) and the Institute for Climate Economics (I4CE) examines how public development banks (PDBs) can align their operations with the Paris Agreement. It distinguishes between 'project-level alignment,' which focuses on consistency with national low-emission climate-resilient development pathways, and the 'portfolio-level net-zero' approach common in the private sector. The document evaluates 11 operational benchmarks—such as inclusion/exclusion lists and scenario modeling—and provides recommendations for PDBs to integrate these tools to maximize climate impact while maintaining their development mandates.

• Paris alignment for public development banks (PDBs) is defined as orienting operations to provide financial, technical, and capacity-building support that is "entirely consistent with recipient countries low-emission climate-resilient development pathways."
• PDBs primarily utilize a "project-level alignment" approach, which involves screening new financing activities to ensure they align with national low-emission climate-resilient development pathways, often using a "do no harm" principle as a minimum condition.
• The "portfolio-level net-zero" approach, typical of private financial institutions, focuses on achieving net-zero financed emissions at the portfolio level. This approach is considered insufficient on its own for PDB Paris alignment because it "does not obligate consistency with low-emission climate-resilient development."
• The report identifies 11 common operational benchmarks used to steer financial flows toward Paris alignment: portfolio emissions tracking, project emissions tracking, absolute or relative emissions targets, shadow carbon pricing, inclusion lists, exclusion lists, scenario modeling, consistency with national development pathways, transition risk assessments, physical risk assessments, and counterparty engagement targets.
• Case studies of five PDBs (EBRD, BII, BNDES, AFD/Proparco, and IDB) show that all implement project-level alignment. Some, such as BII and BNDES, also integrate portfolio-level net-zero benchmarks to facilitate engagement with private-sector clients or maintain long-term institutional consistency.
• Effective implementation of Paris alignment requires strong stakeholder and counterparty engagement. This is critical for obtaining necessary data in regions with scarce information and for supporting the transition of high-emitting clients in "hard-to-abate" sectors.
• PDBs operating across multiple geographies and sectors face greater challenges due to data gaps and the need for context-specific benchmarks, as activities aligned in one country may not be aligned in another.
• The report recommends that PDBs without a comprehensive approach start with project-level alignment and use benchmarks that are as "context-specific as possible," incorporating national development priorities and sectoral transition pathways.
• PDBs are cautioned that an overemphasis on absolute portfolio emissions reductions could contradict their development mandates by disincentivizing necessary investments in transition activities within carbon-intensive sectors.

APA

Chin, N., Pinko, N., Olutoke, J., Eschalier, C., Santos, L. Z., & Bendahou, S. (2024). Approaches to Meeting the Paris Agreement Goals. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/06/Paris-Alignment-Approaches-for-PDBs.pdf

Chicago

Chin, Neil, Nicole Pinko, Jide Olutoke, Claire Eschalier, Luis Zamarioli Santos, and Sarah Bendahou. Approaches to Meeting the Paris Agreement Goals. Climate Policy Initiative, 2024. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/06/Paris-Alignment-Approaches-for-PDBs.pdf.

Wikipedia

{{cite report |last1=Chin |first1=Neil |last2=Pinko |first2=Nicole |last3=Olutoke |first3=Jide |last4=Eschalier |first4=Claire |last5=Santos |first5=Luis Zamarioli |last6=Bendahou |first6=Sarah |title=Approaches to Meeting the Paris Agreement Goals |publisher=Climate Policy Initiative |date=July 2024 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2024/06/Paris-Alignment-Approaches-for-PDBs.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{chin2024approaches, author = {Chin, Neil and Pinko, Nicole and Olutoke, Jide and Eschalier, Claire and Santos, Luis Zamarioli and Bendahou, Sarah}, title = {{Approaches to Meeting the Paris Agreement Goals}}, institution = {Climate Policy Initiative}, year = {2024}, month = jul, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2024/06/Paris-Alignment-Approaches-for-PDBs.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }