Net Climate Finance: Reconciling the Clean and Dirty Sides of the Finance Ledger—2017
Net Climate Finance
Encouraging the scale-up of climate finance flows by not only increasing “clean” flows but also reducing “dirty” finance.
What is Net Climate Finance?
Net climate finance (a term coined by RMI) is the value of climate finance flows minus financial flows to high-emissions and maladaptive activities.
Why Net Climate Finance?
The last ten years have seen a wave of commitments, institutions, and initiatives focused on scaling up climate finance. However, supporting climate-friendly investment is only half the story. In order to “make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development” (Paris Agreement), we must also scale down financing for high-emissions infrastructure and activities.
Why it Matters
Preliminary comparisons of clean and dirty energy sources suggest that net climate finance is in the red by almost any measure. In other words, the balance of investments, including via public finance, are pointing in the wrong direction at a critical juncture for climate action.
What We're Doing
RMI’s work on net climate finance underscores an opportunity to restrict high-emissions finance via 1) policies at multilateral and bilateral finance institutions, and 2) the elimination of domestic fossil fuel subsidies. RMI is working with partner organizations to catalyze the transition to net positive climate finance.
What Salad and Ice Cream Tell us About Climate Finance—2017