Home
This Title All WIREs
WIREs RSS Feed
How to cite this WIREs title:
WIREs Clim Change
Impact Factor: 4.571

From climate finance toward sustainable development finance

Full article on Wiley Online Library:   HTML PDF

Can't access this content? Tell your librarian.

Decarbonizing the global energy system requires large‐scale investment flows, with a central role for international climate finance to mobilize private funds. The willingness to provide international finance in accordance with common but differentiated responsibilities was acknowledged by the broad endorsement of the Paris Agreement, and the Green Climate Funds in particular. The international community aims to mobilize at least USD 100 billion per year for mitigation and adaption in developing countries. In this article, we argue that too little attention has been paid on the spending side of climate finance, both in the political as well as the academic debate. To this end, we review the challenges encountered in project‐based approaches of allocating climate finance in the past. In contrast to project‐based finance, we find many advantages to spending climate finance in support of price‐based national policies. First, the support for international climate cooperation is improved when efforts of successively rising domestic carbon pricing levels are compensated. Second, carbon pricing sets incentives for least‐cost mitigation. Third, investing domestic revenues from emission pricing schemes could advance a country's individual development goals and ensure the recipient's ‘ownership’ of climate policies. We conclude that by reconciling the global goal of cost‐efficient mitigation with national policy priorities, climate finance for carbon pricing could become a central pillar of sustainable development and promote international cooperation to achieve the climate targets laid down in the Paris Agreement. WIREs Clim Change 2017, 8:e437. doi: 10.1002/wcc.437

Schematic representation of international climate finance as usually discussed today (upper panel) and proposed by the authors (lower panel).
[ Normal View | Magnified View ]

Related Articles

Carbon markets: a historical overview
In praise of a green stimulus
Criticizing green stimulus
COP21 and the Paris Agreement

Browse by Topic

Climate and Development > Decoupling Emissions from Development
Climate Economics > Economics and Climate Change

Access to this WIREs title is by subscription only.

Recommend to Your
Librarian Now!

The latest WIREs articles in your inbox

Sign Up for Article Alerts