Search Climate Insights Directory

The report examines BNDES's role in the Legal Amazon from 2009 to 2019, finding that while the North Region receives the highest share of disbursements relative to its GDP, it receives the lowest total share of BNDES funds. Financing is heavily concentrated in large-scale infrastructure, specifically hydroelectric power generation, which often serves the rest of Brazil while local populations remain energy-poor. The authors argue that BNDES has a significant opportunity to pivot toward the energy transition by replacing diesel-based isolated systems with renewable energy and improving basic services like sanitation and internet access to reduce regional inequality.

The Climate Smart Shrimp Fund (CSSF), developed by Conservation International, is a proposed loan bundle and technical assistance facility designed to transition extensive shrimp farms to a 'Climate Smart Shrimp' (CSS) model. This model increases production efficiency in a subset of ponds while restoring mangroves in others to provide carbon sequestration and coastal protection. The instrument is currently in a pilot phase in Indonesia, Ecuador, and the Philippines, with a goal to scale to a USD 100 million fund targeting six countries. Financial modeling suggests the approach can increase farm-level profits fourfold compared to business-as-usual scenarios and offers a viable debt service coverage ratio for investors.

The methodology for the Landscape of Climate Finance in Africa 2022 defines the scope, terminology, and data treatment used to capture climate finance flows across the continent. It utilizes a combination of public and proprietary data from sources such as BNEF, OECD, and the Climate Bonds Initiative, focusing on mitigation, adaptation, and dual-benefit finance. The document details sector classifications—ranging from energy systems to agriculture—and regional groupings based on UN standards. It also identifies significant data gaps, including the difficulty of tracking domestic budget expenditures, private sector investments in adaptation, and the lack of official reporting on Chinese investments in Africa.

The Reservoir Methane Capture Mechanism (RMCM) is a first-of-its-kind Special Purpose Vehicle (SPV) designed to unlock public and private investment for capturing methane from the turbined waters of hydroelectric plants. The mechanism uses a 'methane capture-as-a-service' model to remove the need for initial capital expenditure by hydropower operators. The project follows a three-stage implementation: a USD 6.5 million proof-of-concept, a USD 54 million pilot phase involving five plants, and a scale-up phase targeting 273 projects with a potential capital mobilization of USD 3 billion. Revenues are generated through the sale of electricity and carbon credits, with the latter requiring the development of a new methodology via Gold Standard. At full scale, the RMCM aims to capture 217,000 tons of methane annually, avoiding 6.8 million tons of CO2e.

The Fund for Nature (TFFN) is a financial instrument designed to provide market-rate project-level debt to nature-based carbon projects, primarily in Sub-Saharan Africa. By offering an alternative to the common practice of pre-selling carbon credits at steep discounts to corporate buyers, TFFN aims to increase the revenue captured by local project implementers and communities. A central innovation of the fund is the development of a standardized, open-sourced Simple Agreement for Future Offtake (SAFO), which serves as a bankable document to secure future carbon credit supply and act as collateral for debt. The fund targets the agriculture, forestry, and blue carbon sectors, specifically focusing on afforestation, reforestation, and revegetation (ARR) and reducing emissions from deforestation and forest degradation (REDD+). A pilot fund of USD 50-70 million is envisioned, with the potential to scale as voluntary carbon markets are projected to grow significantly by 2030.

The report highlights that forest degradation in the Brazilian Amazon—defined as the partial loss of vegetation—is a critical but neglected threat to climate goals. It asserts that degradation often exceeds deforestation in terms of annual area affected and carbon emissions, driven by selective logging, forest fires, and the edge effects of deforestation. The author argues that Brazil possesses the technical capacity to monitor this phenomenon but fails to include it in official environmental performance metrics or greenhouse gas inventories. The document calls for Brazil to integrate degradation measures into its policies and international reporting to reclaim a global leadership role in climate action.

Tracked green finance in India averaged INR 309 thousand crores (~USD 44 billion) per annum in FY 2019-20, which is less than 25% of the annual amount required to meet the country's Nationally Determined Contributions (NDCs). While flows increased by 150% from FY2017/18 to FY2019/20, the report highlights a critical shortfall in adaptation funding and a heavy reliance on public sector finance for clean transportation. The study recommends the development of a green taxonomy, improved data disclosure, and the scaling of capital markets to mobilize the trillions of dollars needed for India's 2030 and 2070 Net-Zero goals.

The policy brief highlights that forest degradation in the Brazilian Amazon is a critical but overlooked driver of greenhouse gas emissions, often exceeding the impact of clear-cut deforestation. It identifies selective logging, fire, and the edge effects of deforestation as primary drivers. The author contends that while Brazil possesses the technical capacity to monitor degradation, it fails to include these emissions in national inventories or set specific reduction targets. The document calls for the integration of degradation metrics into environmental performance indicators and the application of Brazil's experience in combating deforestation to address this complex phenomenon.

Africa's climate finance needs are estimated at USD 250 billion annually, yet only USD 29.5 billion was mobilized in 2020. The report identifies critical barriers—financial, governance, project-level, and infrastructure-related—across the energy, transport, buildings, and AFOLU sectors. It argues that bridging this gap requires 'climate finance innovation,' defined as using financial instruments to overcome barriers in novel contexts. The document details a toolbox of solutions, including blended finance, capital market instruments like YieldCos and Green Bonds, and results-based finance, while providing case studies such as TerraFund and Acorn to demonstrate how these tools can catalyze private investment.

The report details a comprehensive methodology for mapping green finance in India, focusing on mitigation activities across clean energy, energy efficiency, and clean transportation. It defines a taxonomy for green finance, identifies diverse data sources—including government budgets, OECD reports, and PSU financial statements—and establishes accounting principles to prevent double counting. The methodology employs specific proxy calculations for sectors like electric vehicles and rooftop solar, while utilizing a standard 70:30 debt-to-equity gearing ratio where specific project data is unavailable.

This research paper by the Climate Policy Initiative serves as a foundational guide for the Cities Climate Finance Leadership Alliance to analyze challenges and priorities for decarbonizing the buildings sector. It outlines the global investment needs, the role of different financial instruments, and the specific regulatory and environmental contexts of Nigeria and Indonesia.

The report argues that land transport infrastructure is a primary driver of deforestation in the Amazon, noting that until 2006, approximately 95% of deforestation occurred within 5.5 km of a road. To address this, the Climate Policy Initiative (CPI/PUC-Rio) proposes a roadmap based on three pillars: anticipating socio-environmental analysis in decision-making, improving the quality of socio-environmental studies, and increasing transparency. Key recommendations include introducing a pre-feasibility phase, utilizing a 'market access' approach to define indirect areas of influence, and creating a single publicly available georeferenced database for infrastructure projects. The report highlights systemic failures, such as the fact that 57% of primary documents for ten analyzed federal concessions were unavailable and that no analyzed Environmental Impact Assessment (EIA) completely complied with its terms of reference.

The report argues that land transport infrastructure is a primary driver of deforestation in the Amazon, noting that 95% of forest conversion occurred within 5.5 km of roads up to 2006. To decouple infrastructure from deforestation, the authors propose three pillars of reform: reforming the public administration's decision-making flow to anticipate socio-environmental analysis, improving the technical quality and scope of socio-environmental studies (specifically the delimitation of indirect influence areas), and increasing transparency through open georeferenced databases. The report identifies significant gaps in current practices, such as the lack of available approval minutes for Technical, Economic, and Environmental Viability Studies (EVTEA) and the failure of Environmental Impact Studies (EIA) to fully comply with their terms of reference.

The report examines the role of the buildings sector in global GHG emissions, which account for 37% of energy-related emissions. It identifies key technical solutions for decarbonization, including reducing embodied carbon in materials and improving operational efficiency in heating and cooling. The document evaluates various financial instruments—ranging from traditional mortgages to specialized on-bill financing—and policy tools like building codes and green labels. It emphasizes that the transition requires a network of instruments tailored to different building archetypes and regional contexts, providing specific deep dives into the unique challenges and opportunities in Nigeria and Indonesia.

The research employs a Fixed Effect design to analyze how mining royalties per capita correlate with socioeconomic indicators (health, education, employment, and income) and homicide rates, as well as municipal fiscal spending. While simple correlations suggest mining royalties improve socioeconomic outcomes and increase violence, the application of municipality and year fixed effects removes the statistical significance for economic outcomes and reveals a negative correlation with homicide rates. In terms of fiscal impact, an increase of R$ 1 in mining royalties is associated with a corresponding R$ 1 increase in total expenditures, primarily affecting public sector wages and pensions, followed by health and education. The study also notes that mining royalties are not associated with increased urban property tax (IPTU) revenue, suggesting a potential reduction in fiscal effort by benefited municipalities.

The research employs a fixed-effects model to analyze how mining royalties (CFEM) correlate with socioeconomic indicators (health, education, employment, and income) and homicide rates in Pará. While simple correlations suggest royalties improve socioeconomic variables and increase violence, the application of municipality and year fixed effects removes the statistical significance of these correlations. However, the study finds a strong positive correlation between increased royalties and municipal spending, particularly in public sector salaries and pensions, and suggests that royalties may reduce municipal efforts to collect urban property tax (IPTU).

The report compares the Agricultural Activity Guarantee Program (PROAGRO) and the Rural Insurance Premium Subsidy Program (PSR) in Brazil. It finds that PROAGRO's design, where the government bears the risk while financial institutions operate the program, leads to severe information asymmetries, moral hazard, and higher claim rates. In contrast, the PSR, where insurers bear the risk, provides stronger incentives for monitoring and selection, resulting in lower claim rates and a more sustainable financial balance. The authors recommend migrating resources from PROAGRO to the PSR, improving the training of claims adjusters, and incorporating parametric insurance and sustainable management criteria into policy design.

The report compares the Proagro and PSR rural insurance programs in Brazil, finding that Proagro's design—where the government assumes risk while financial institutions operate the program—creates significant information asymmetries and moral hazard. This leads to higher claim rates and increasing costs for the National Treasury. In contrast, the PSR, where private insurers bear the risk, shows greater efficiency and growth, though it struggles to reach small-scale producers. The authors recommend migrating resources toward the PSR, improving claim verification through technology and training, and integrating sustainable farming criteria into risk zoning to enhance the sustainability of Brazilian agriculture.

The report argues that land transport infrastructure is a primary driver of deforestation in the Amazon, noting that until 2006, approximately 95% of deforestation occurred within 5.5 km of a road. It identifies critical failures in the current project life cycle, including a lack of linear decision-making, poor quality of socio-environmental studies, and a severe lack of transparency. To address this, the authors propose a roadmap based on three pillars: anticipating socio-environmental analysis, improving study quality, and increasing transparency. Key recommendations include introducing a pre-feasibility phase, requiring Technical, Economic, and Environmental Feasibility Studies (EVTEA) to precede Environmental Impact Assessments (EIA), and implementing a georeferenced database (GIS) to track projects and their impacts on conservation units and indigenous lands.

The report finds that targeted methane abatement finance is severely underfunded, representing less than 2% of total climate finance at USD 11.6 billion in 2019/2020. Despite the high mitigation potential and availability of low-cost technologies, particularly in the fossil fuel sector, investment is disproportionately concentrated in the waste sector. The authors argue that a tenfold increase in annual finance is required to meet the estimated USD 119 billion needed to keep warming under +2C.