15 December 2016 – This article explores the scale of climate finance and investment needs embodied in the Paris Agreement. It reveals that there is little clarity in the numbers from the plethora of sources (official and otherwise) on climate finance and investment.
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The article compares the US$100 billion target in the Paris Agreement with a range of other financial metrics, such as investment, incremental investment, energy expenditure, energy subsidies, and welfare losses. While the relatively narrowly defined climate finance included in the US$100 billion figure is a fraction of the broader finance and investment needs of climate-change mitigation and adaptation, it is significant when compared to some estimates of the net incremental costs of decarbonization that take into account capital and operating cost savings. However, even if the annual US$100 billion materializes, achieving the much larger implied shifts in investment will require the enactment of long-term internationally coordinated policies, far more stringent than have yet been introduced.
About the Author
Read more about Stephen Peake on our Senior Associates page.
