Increasing Public Finance

This guide from the World Resources Institute outlines various instruments for raising public finance to support climate goals, focusing on international public finance, climate bonds, debt-for-climate swaps, and national climate funds. It details how these mechanisms can help developing countries fill funding gaps for their Nationally Determined Contributions (NDCs), the benefits and challenges associated with each, and provides real-world examples of their implementation.

• International public climate finance consists of multilateral and bilateral funding—including loans, grants, and guarantees—channeled from developed to developing countries. It is often managed through development banks (e.g., World Bank, Asian Development Bank), climate funds (e.g., Green Climate Fund, Adaptation Fund), or bilateral agencies (e.g., U.S. Agency for International Development).
• Developed countries have failed to meet their committed funding goal of US$ 100 billion. This shortage of public finance is particularly critical for sectors that do not generate revenue, such as adaptation and loss and damage.
• Climate bonds allow governments to raise capital for climate projects by issuing debt linked to positive environmental or social impacts. As of 2022, green, social, and sustainability bonds totaled US$ 858.5 billion, with green bonds accounting for US$ 487.1 billion. Some issuers benefit from a "greenium," paying lower interest rates than on regular bonds.
• Debt-for-climate swaps enable debtor governments to reduce their debt burden or improve loan terms in exchange for commitments to invest in climate initiatives. These can be bilateral agreements or facilitated by third parties, such as the 2021 partnership between the Nature Conservancy and Belize, where $553 million in bonds were bought back at a discount to fund marine protection.
• National climate funds are specialized vehicles used to pool and distribute resources from diverse sources—such as government budgets, environmental fines, and international donations—to implement national and subnational climate projects. Examples include Chile's Fondo Naturaleza Chile (est. 2021) and Costa Rica's FONAFIFO (est. 1996).

APA

World Resources Institute (n.d.). Increasing Public Finance. https://www.wri.org/paying-for-paris/increasing-public-finance

Chicago

World Resources Institute. Increasing Public Finance. n.d. https://www.wri.org/paying-for-paris/increasing-public-finance.

Wikipedia

{{cite report |author=World Resources Institute |title=Increasing Public Finance |url=https://www.wri.org/paying-for-paris/increasing-public-finance |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendincreasing, author = {{World Resources Institute}}, title = {{Increasing Public Finance}}, institution = {World Resources Institute}, url = {https://www.wri.org/paying-for-paris/increasing-public-finance}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }