Aligning policy-based finance with the Paris Agreement

The paper argues that public development banks lack a published approach to ensure that unearmarked loans provided for policy and institutional reforms—known as policy-based operations (PBOs)—are aligned with the Paris Agreement. It proposes that PBOs are Paris-aligned if they do not undermine a just transition to climate neutrality by increasing exposure to climate risks and, where possible, promote long-term macro-fiscal resilience.

• Public development banks have not yet disclosed their strategies for ensuring that policy-based operations (PBOs) are aligned with the Paris Agreement, despite having made climate pledges.
• Current lending practices for PBOs risk undermining the just transition to global carbon neutrality by 2050, as the associated policy actions significantly influence emissions patterns and climate vulnerability.
• The authors define Paris-aligned PBOs as those that avoid increasing macroeconomic, fiscal, or social exposure to climate risks and actively support long-term macro-fiscal resilience and a just transition to climate neutrality.

APA

NewClimate Institute (2022). Aligning policy-based finance with the Paris Agreement. http://www.newclimate.org/resources/publications/aligning-policy-based-finance-with-the-paris-agreement

Chicago

NewClimate Institute. Aligning policy-based finance with the Paris Agreement. 2022. http://www.newclimate.org/resources/publications/aligning-policy-based-finance-with-the-paris-agreement.

Wikipedia

{{cite report |author=NewClimate Institute |title=Aligning policy-based finance with the Paris Agreement |date=27 October 2022 |url=http://www.newclimate.org/resources/publications/aligning-policy-based-finance-with-the-paris-agreement |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{newclimateinstitute2022aligning, author = {{NewClimate Institute}}, title = {{Aligning policy-based finance with the Paris Agreement}}, institution = {NewClimate Institute}, year = {2022}, month = oct, url = {http://www.newclimate.org/resources/publications/aligning-policy-based-finance-with-the-paris-agreement}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }