1. Context and definition of the concept
- Climate finance refers to the economic resources, from public or private sources, allocated to support projects and initiatives geared towards mitigating or adapting to climate change. The scale of the goals to be achieved as regards climate means that a huge volume of finance is needed to carry out the necessary measures.
- Climate finance resources come from very diverse sources: public budgets from governments, private investments that raise resources by issuing financial products (such as green bonds), multilateral funds as part of the United Nations Framework Convention on Climate Change process (such as the Green Climate Fund and the Adaptation Fund)…
- The range of projects that are eligible for inclusion under the climate finance umbrella is very broad. The following are some examples:
- A project to develop renewable energies (e.g. a wind farm).
- Investments in improving energy efficiency (e.g. replacing an old boiler in the home with a more efficient modern version).
- Promoting initiatives to boost sustainability in transport (e.g. setting up a municipal bicycle system in a city).
- Promoting sustainable agriculture practices (e.g. improvements in irrigation management.