Background Report on Long-term Climate Finance

The report assesses the global climate finance landscape, highlighting the critical role of public finance in catalyzing private investment. It examines various financial tools—including green bonds, carbon pricing, and risk mitigation instruments—and analyzes the performance of multilateral development banks and bilateral agencies. The document emphasizes that while global flows have increased, significant gaps remain in tracking private finance and achieving the USD 100 billion goal due to low carbon prices and a lack of stable enabling environments in developing nations.

• Global investment needs to limit temperature rise to 2 degrees Celsius are estimated in the trillions of USD through 2050, far exceeding current flows.
• The assumption of a global carbon price of USD 20–25 per tonne of CO2 by 2020, central to previous projections by the High-level Advisory Group (AGF), is unlikely to be met, reducing the potential of carbon-based finance.
• Public finance is essential as a catalytic driver to reduce costs and risks for low-carbon investments, particularly for the most vulnerable countries and adaptation activities that struggle to attract private capital.
• Private capital is the largest source of global climate investment, but its full potential is hindered by incomplete financial systems and a lack of shared understanding on how to track 'mobilized' finance.
• Multilateral Development Banks (MDBs) committed between USD 21.6 and 24.7 billion annually to climate finance in developing and emerging countries from 2011 to 2013, with mitigation receiving four times more funding than adaptation.
• The removal of fossil fuel subsidies presents an opportunity to redirect funds toward climate action; in 2013, global consumer subsidies for fossil fuels (USD 550 billion) were more than four times the support for renewable energy (USD 121 billion).
• Risk mitigation instruments, such as guarantees and political risk insurance, are critical for unlocking private investment in developing countries by addressing political, macroeconomic, and financing risks.
• Carbon offset markets are performing significantly below previous projections due to a sharp decline in demand and falling carbon prices.
• Stable enabling environments, including predictable regulatory frameworks and clear price signals, are essential for mobilizing private finance at scale.

APA

Lund, H. F., Clapp, C., Torvanger, A., Wilkinson, J., Buchner, B., Stadelmann, M., Mazza, F., Oliver, P., & Abramskiehn, D. (2015). Background Report on Long-term Climate Finance. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2015/06/2015-Background-report-on-long-term-climate-finance.pdf

Chicago

Lund, Harald Francke, Christa Clapp, Asbjørn Torvanger, Jane Wilkinson, Barbara Buchner, Martin Stadelmann, Federico Mazza, Padraig Oliver, and Dario Abramskiehn. Background Report on Long-term Climate Finance. Climate Policy Initiative, 2015. https://www.climatepolicyinitiative.org/wp-content/uploads/2015/06/2015-Background-report-on-long-term-climate-finance.pdf.

Wikipedia

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BibTeX

@techreport{lund2015background, author = {Lund, Harald Francke and Clapp, Christa and Torvanger, Asbjørn and Wilkinson, Jane and Buchner, Barbara and Stadelmann, Martin and Mazza, Federico and Oliver, Padraig and Abramskiehn, Dario}, title = {{Background Report on Long-term Climate Finance}}, institution = {Climate Policy Initiative}, year = {2015}, month = jun, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2015/06/2015-Background-report-on-long-term-climate-finance.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }