Results-based finance in the Paris era

The document examines the use of carbon market infrastructure to provide results-based finance, noting that while it offers standardized metrics and crowdfunding capabilities, it often prioritizes cheap mitigation over transformative change and creates risks for small developers. It suggests that results-based finance is best suited for a niche of proven but not yet mature technologies, while nascent technologies require grants.

• Carbon market mechanisms provide a standardized, comparable metric (CO2e) and infrastructure that allows multiple small donors to 'crowdfund' mitigation projects with a degree of transparency.
• The use of CO2e as a metric often leads to a focus on the cheapest mitigation options, which can undermine future climate ambition and neglect the 'high hanging fruit' necessary for transformative change in developing countries.
• Results-based finance through carbon markets creates biases against smaller developers, community projects, and innovative early-stage technologies because project developers primarily bear the risks.
• The document identifies several structural limitations of results-based finance, including high transaction costs for measurement and verification, market volatility affecting projects requiring constant revenue, and a lack of suitability for least developed countries with low emissions.
• Results-based finance is most effective for a specific niche where technology is proven but not yet mature; conversely, nascent R&D technologies are better suited for grants, and mature technologies for market rate loans.

APA

NewClimate Institute (2020). Results-based finance in the Paris era. http://www.newclimate.org/resources/publications/results-based-finance-in-the-paris-era

Chicago

NewClimate Institute. Results-based finance in the Paris era. 2020. http://www.newclimate.org/resources/publications/results-based-finance-in-the-paris-era.

Wikipedia

{{cite report |author=NewClimate Institute |title=Results-based finance in the Paris era |date=16 December 2020 |url=http://www.newclimate.org/resources/publications/results-based-finance-in-the-paris-era |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{newclimateinstitute2020resultsbased, author = {{NewClimate Institute}}, title = {{Results-based finance in the Paris era}}, institution = {NewClimate Institute}, year = {2020}, month = dec, url = {http://www.newclimate.org/resources/publications/results-based-finance-in-the-paris-era}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }