This working paper assesses how Multilateral Development Banks can support the global temperature goal of the Paris Agreement. It illustrates how the banks could strengthen existing tools to align their portfolios and activities with the globally agreed mitigation goal. Other finance institutions can also profit from many of the approaches included in the paper. The analysis starts with a review of scientific scenarios to understand what the temperature goal means for different investment areas. It also reviews existing tools and activities at the Multilateral Development Banks. Building on...

The refrigeration and air conditioning (RAC) sector faces a particular challenge in the implementation of effective finance strategies given its cross-sectoral nature – extending from manufacturing of gases and appliances to energy end-use in buildings – and hence the different institutional responsibilities as well as policy and compliance regimes that affect the sector. Against this backdrop, this paper focusses on questions related to the financing of the low-carbon transition of the RAC sector. The objective of the paper is to provide an overview of the current finance situation in the...

The Allianz Climate & Energy Monitor Deep Dive aims to inform investors and policy-makers on the scale of investments needed in China, India and the US to be in line with the Paris goals; and what recent developments, especially regarding the leadership change in the US, mean for investing in renewable power in the future. Key findings: Investments in China and the US need to roughly double, in India even triple, to remain within the Paris Agreement warming limit. Renewable power investments will need to rapidly grow in the coming two decades to be in line with the Paris Agreement targets...

In a consortium led by the Finnish consultancy GAIA and with the Stockholm Environment Institute (SEI), NewClimate Institute carried out a study on behalf of the Nordic Working Group for Global Climate Negotiations (NOAK) to identify how Nordic finance institutions can best contribute to mobilising climate finance to developing countries in a way that supports the implementation of the Paris Agreement. The study mapped current financial support needs communicated through developing countries’ Intended Nationally Determined Contributions (INDCs) to identify potential support gaps where Nordic...

NewClimate Institute contributed to a policy brief on ‘Two unconventional options to enhance multilateral climate finance’ under the European Capacity Building Initiative (ecbi). The brief considers two unconventional sources of finance to overcome the current challenges in multilateral climate finance and enhance predictability and magnitude: a ‘share of proceeds’ from national and sub-national emission trading schemes; and crowdfunding from corporate air passengers.

With the historic Paris Agreement in place, Nationally Determined Contributions (NDCs), together with the availability of new sources of climate finance, including the Green Climate Fund (GCF), lay the groundwork for ambitious, country-driven climate action. Achieving NDC goals will require substantial investments in support of low-carbon, climate-resilient infrastructure and most of those investments will come from the private sector. The challenge going forward will be to turn NDCs into transformational action on the ground in ways that can catalyze private sector investments. Nationally...

The Allianz Climate and Energy Monitor ranks G20 member states on their attractiveness as potential destinations for investment in low-carbon electricity infrastructure. It takes into account their current and future investment needs in line with a 2° C global warming trajectory. Consistency with the Paris Agreement, negotiated by 195 countries at the end of 2015, would require a full decarbonization of the global economy before the end of the century. This transformation will be particularly challenging for the energy sector – the largest source of carbon emissions. Every existing and new...

This report studies the development of criteria for assessing the compatibility of financial investments with the international goal to limit global temperature increase to below 2°C above pre-industrial levels. The findings are intended as a starting point and a key input for a longer term process to develop consensus-based 2°C investing criteria. The focus here is placed on investments in projects and physical assets, in particular of development and climate finance organisations. In order to limit global temperature increase to 2°C, global greenhouse gas (GHG) emissions will have to be...

This study clarifies the definition of results-based financing (RBF) and in particular its role in the context of climate policy. The publication is aimed at readers from the carbon markets and climate finance communities alike. It facilitates a common understanding of what RBF as a financing modality involves and is therefore meant to also be a good starting point for readers looking into this topic for the first time. An overview of results-based finance options and opportunities for linking market and non-market approaches is provided. Combining carbon market and non-market climate finance...

The German government, through the German Federal Environment Agency, commissioned a consortium consisting of NewClimate Institute, Germanwatch, and the 2° Investing Initiative to explore criteria to measure the alignment of investment and financing with the 2°C limit. The project focuses in particular on development finance institutions. This report was prepared in the context of the G7 summit meeting. It maps existing 2°C relevant criteria used by financial institutions and discusses what 2°C criteria might look like for key investment areas.