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Global investments in energy transition technologies reached a record USD 1.3 trillion in 2022, yet this remains insufficient to meet climate goals, with annual needs estimated at over USD 5 trillion. While renewable energy investments are growing, they are heavily concentrated in a few regions—primarily East Asia and the Pacific—and specific technologies like solar PV and wind. Conversely, fossil fuel investments continue to rise, and subsidies remain high, particularly in Europe and the MENA region. The report emphasizes the need for a fundamental shift in financing for the Global South, calling for more innovative public finance instruments, the mobilization of institutional capital, and a transition away from fossil fuel funding to ensure a just and inclusive energy transition.

The document outlines the data sources, classification systems, and analytical principles used by the International Renewable Energy Agency (IRENA) and Climate Policy Initiative (CPI) to track renewable energy finance. It defines the scope of investors, financial instruments, and technologies analyzed, while distinguishing between power generation and end-use applications. It also specifies the methodology for tracking off-grid investments in emerging and developing countries and explains the distinction between 'energy transition investments' and 'climate finance'.

Global energy transition investments reached a record USD 1.3 trillion in 2022, but this is less than one-third of the annual USD 5 trillion needed to meet the 1.5°C Scenario. While renewable energy investments grew to nearly USD 0.5 trillion in 2022, they remain heavily concentrated in solar and wind technologies and a few regions, primarily East Asia and Pacific. Developing and emerging markets receive a disproportionately small share of finance; for example, Sub-Saharan Africa received less than 1.5% of global investments between 2000 and 2020. The report emphasizes that private capital prioritizes low-risk, commercially viable projects, leaving a critical gap in less mature technologies and high-risk regions. It argues for a fundamental shift in public financing, moving beyond simple de-risking to provide more grants, concessional loans, and innovative instruments like local currency lending and green bonds to ensure a just and inclusive transition.

The report finds that global methane abatement finance reached USD 13.7 billion in 2021/22, yet remains far below the estimated annual need of USD 48 billion by 2030. While the AFOLU sector saw a 77% increase in funding, the fossil fuel sector—which has the highest mitigation potential—received less than 1% of tracked finance. Private sources provided 70% of total funding, primarily through debt and equity, while public finance declined by 10%. Geographically, East Asia and the Pacific, the U.S. and Canada, and Western Europe are the top recipients, leaving a significant support gap in Latin America and South Asia.

The report finds that while global climate finance reached USD 1.3 trillion in 2021–2022, adaptation finance is diminishing in relative importance, accounting for only 5% of total flows. Developing countries face a significant funding gap, needing approximately USD 212 billion annually by 2030. In Africa, adaptation finance grew modestly by 14% to USD 13 billion annually, yet remains far below the estimated need of USD 53 billion per year. The analysis highlights an over-reliance on debt as the primary financial instrument and a critical lack of robust, adaptation-specific commitments from public financial institutions. Furthermore, it reveals a disconnect between adaptation finance and humanitarian aid, noting that the most fragile African states depend on emergency response funding because they struggle to access proactive adaptation finance.

The South African Climate Finance Landscape 2023 report finds that while annual tracked climate finance reached an all-time high of R131 billion between 2019 and 2021, this remains significantly below the estimated annual needs of R334 billion to R535 billion. The landscape is heavily dominated by domestic private sector debt, with clean energy receiving the vast majority of funding, while adaptation and low-carbon transport remain severely underfunded.

The report finds that dedicated outdoor air quality funding is critically low, representing less than 1% of total international development commitments. While there is a significant pool of funding with air quality co-benefits, the report argues for more explicit intentionality in project design. It highlights a geographic concentration of funds in Asia and a lack of investment in Africa. The document also notes a positive trend where funding for air quality projects exceeded fossil fuel-prolonging projects for the first time in 2021.

The briefing analyzes PL nº 36/2021, which proposes significant changes to the Brazilian Forest Code. The authors argue that the bill would create a regime of general amnesty for illegal deforestation between 2008 and 2020, potentially canceling 35 billion reais in fines. Key concerns include the 'tacit approval' of rural environmental registries (CAR), the indefinite postponement of environmental regularization through the PRA, and the weakening of protections for various biomes and conservation units.

An analysis of Indonesian commercial banks reveals that while there is 100% compliance with mandatory sustainability reporting under POJK 51, the quality of these reports lacks the technical depth required by international standards like the TCFD. Between 2019 and 2021, ESG portfolios reached USD 3.6 trillion, but over 70% of this was directed toward MSME financing rather than green activities. Private banks show a higher proportion of green finance (41%) compared to state-owned banks (23%), yet the total commercial bank contribution meets only 9% of the USD 285 billion needed for Indonesia's 2030 climate goals. Significant gaps exist in risk management, with fewer than 15% of banks integrating climate-related risks into their overall risk frameworks, and none incorporating climate impacts into their financial statements.

This research paper by the Climate Policy Initiative evaluates methodologies for tracking investments in climate resilient infrastructure (CRI). The study pilots a framework based on five climate resilience principles across the water, transport, energy, and AFOLU sectors, finding that CRI investments are a small fraction of total infrastructure spending, with USD 87 spent on non-resilient projects for every USD 1 spent on CRI.

The policy brief provides a detailed 'radiography' of the implementation of the Brazilian Forest Code, focusing on the Rural Environmental Registry (CAR) and the Environmental Regularization Program (PRA). It identifies a significant gap between the initial registration of properties and the final stage of environmental regularization, noting that while registration is consolidated, the analysis of data remains a primary bottleneck. The authors highlight extreme heterogeneity among states, with a few leaders like Mato Grosso and Pará, and others remaining stagnant. The document outlines systemic challenges across individual, institutional, technical-economic, and legal dimensions and recommends a national implementation plan, strengthening of the SICAR system, and better integration with agricultural credit and anti-deforestation policies.

The report finds that while Indonesian banks show high compliance with national sustainability reporting mandates (POJK 51/2017) and are increasing their green portfolios, they lack the capacity and frameworks to implement detailed climate-related financial disclosures. Benchmarking against TCFD reveals significant gaps in governance, strategy, risk management, and metrics, with no surveyed bank fully aligned. Climate-related impacts are not yet integrated into formal financial statements or risk assessments like the ICAAP, though there is a growing trend toward adopting green taxonomies.

The report analyzes deforestation in the Amazon biome from 2012 to 2021, highlighting that federal public lands and private areas accounted for 45% and 28% of deforestation, respectively. It argues for a coordinated strategy where the federal government focuses on rural settlements and land tenure regularization, while state governments prioritize the implementation of the Forest Code on private lands. The study emphasizes a recent acceleration of deforestation in federal lands and areas without land tenure information, particularly from 2019 onwards, and calls for improved public data integration to enhance transparency and effectiveness.

The report finds that investments in climate resilient infrastructure (CRI) are in their nascent stages, representing only about 1.1% of average annual infrastructure investment in 2019/20. It proposes a five-principle framework to define and track CRI, though data gaps limited its operationalization to three principles. The study highlights a significant gap between investment and vulnerability, noting no correlation between per capita CRI investment and the ND-GAIN Vulnerability Index. It recommends the adoption of common resilience principles, mandated double materiality disclosures, and the creation of a standardized CRI taxonomy to scale finance.

Between 2012 and 2021, the North Region of Brazil received R$ 30.6 billion (US$ 11.1 billion) for land transport infrastructure, representing 17% of the national total tracked. Public sources provided 78% of this funding, with the federal government as the primary source. The rail sector was the largest beneficiary in the North, receiving 55% of resources, heavily driven by the Carajás Railroad. In contrast, public budget funds in the North were overwhelmingly directed to highways (99%), primarily for maintenance and operation (79%). While private finance via incentivized debentures grew nationally, it accounted for 22% of the North's flows. Multilateral Development Banks (MDBs) contributed R$ 3 billion, with the New Development Bank (NDB) being the most active in the region. The report emphasizes that without improved governance and rigorous socio-environmental analysis, these investments risk driving deforestation in the Amazon.

The study finds that while training alone is effective for larger ranchers (above 100 hectares), small ranchers require the addition of technical assistance to implement sustainable practices. This is attributed to constraints in education, credit access, and investment capacity among smaller producers. The authors recommend a cost-effective policy of providing universal training while targeting expensive technical assistance specifically to smallholders.

The document outlines the role of Coal Transition Mechanisms (CTMs) in accelerating the shift from coal to clean energy, particularly in emerging markets. It highlights the challenge that 93% of coal capacity is shielded from market pressures by regulation or contracts, necessitating blended finance and CTMs to manage early retirement. To address reputational risks—such as the appearance of financing coal or failing to protect workers—the authors propose a framework focused on assessing moral hazard, ensuring Paris-aligned emissions savings, supporting just transition provisions, and maintaining transparency through public disclosures.

In 2021, IDFC members committed a record USD 224 billion in green finance, a 21% increase from 2020. Climate finance dominated the total at 95% (USD 212.7 billion), with mitigation finance reaching a peak of USD 186.6 billion. Conversely, adaptation finance fell by 24% to USD 20.9 billion, largely due to a 50% drop in disaster risk reduction commitments. Biodiversity projects saw growth, reaching USD 18.4 billion.

This brief report by the Climate Policy Initiative presents preliminary findings from a study on global climate finance for agriculture, forestry, other land uses, and fisheries (AFOLU). It highlights a significant funding gap, noting that AFOLU receives only a small fraction of total climate finance despite the sectors' high emissions and economic importance, particularly in low-income countries.

This report by the Climate Policy Initiative analyzes the climate finance landscape in Ethiopia for the 2019/2020 period, highlighting a significant gap between committed investments and estimated needs, as well as a heavy reliance on international public grants.