Unpacking Article 2.1(c): Conceptual and Political Dimensions

This discussion paper by the NewClimate Institute, Germanwatch, and the Frankfurt School of Finance and Management examines the conceptual and political challenges of implementing Article 2.1(c) of the Paris Agreement. It analyzes diverging interpretations of the article's scope, proposes a working definition for assessing financial flow alignment, and identifies systemic barriers in developing countries that necessitate global financial architecture reform.

• Article 2.1(c) of the Paris Agreement is subject to three primary diverging interpretations: as an obligation linked to Article 9 focusing on finance for developing countries, as a broad transformation goal covering all public and private financial flows, or as a complementary element to mitigation and adaptation goals in Articles 2.1(a) and (b).
• There are significant conceptual debates regarding the meaning of 'consistency' and 'pathway' for climate-resilient development, specifically whether these should be based on 1.5°C-consistent mitigation targets, national priorities, or a combination of both.
• While Article 2.1(c) applies to all financial flows, current assessment and policy efforts are limited to a narrow subset, failing to include trade-related finance and informal flows.
• Governments can utilize two primary types of policy levers to implement Article 2.1(c): market-led instruments, including climate disclosure frameworks and taxonomies, and market-shaping strategies, such as trade and fiscal measures.
• Developing countries face systemic barriers to implementing Article 2.1(c), including limited fiscal space, high capital costs, and debt burdens, which indicates a requirement for international cooperation and reform of the global financial architecture.

APA

NewClimate Institute (2025). Unpacking Article 2.1(c): Conceptual and Political Dimensions. http://www.newclimate.org/resources/publications/discussion-paper-unpacking-article-21c-conceptual-and-political-dimensions

Chicago

NewClimate Institute. Unpacking Article 2.1(c): Conceptual and Political Dimensions. 2025. http://www.newclimate.org/resources/publications/discussion-paper-unpacking-article-21c-conceptual-and-political-dimensions.

Wikipedia

{{cite report |author=NewClimate Institute |title=Unpacking Article 2.1(c): Conceptual and Political Dimensions |date=23 October 2025 |url=http://www.newclimate.org/resources/publications/discussion-paper-unpacking-article-21c-conceptual-and-political-dimensions |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{newclimateinstitute2025unpacking, author = {{NewClimate Institute}}, title = {{Unpacking Article 2.1(c): Conceptual and Political Dimensions}}, institution = {NewClimate Institute}, year = {2025}, month = oct, url = {http://www.newclimate.org/resources/publications/discussion-paper-unpacking-article-21c-conceptual-and-political-dimensions}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }