Stabilizing the global climate is one of the most urgent challenges in coming decades. Our warming world affects all people and ecosystems, particularly the poor who already suffer disproportionately from climate-change impacts.
Global Investment for a Resilient Low-Carbon Economy
Major financial investments – from both public and private sources and guided by smart and equitable policies – are required to transition the world’s economy to a low-carbon path, reduce greenhouse gas concentrations to safe levels, and build the resilience of vulnerable countries to climate change.
WRI is addressing how these massive investments toward a low-carbon and resilient economy – which we refer to as climate finance –can be realized.
In developing countries, climate change investment needs are significant. Direct government funding is scarce. And the billions of dollars committed to be marshaled by industrialized countries remain inadequate to the magnitude of the challenge of stabilizing a steep trajectory of greenhouse gases. Additional financial investment should be accompanied by rules, regulations, fiscal incentives and effective markets at international, national, and sub-national levels to shift current and projected “business-as-usual” investments, and mobilize resources at the scale required.
Facts and Figures: The Scale of Needed Investment
The World Economic Forum projects that by 2020, about $5.7 trillion will need to be invested annually in green infrastructure, much of which will be in today’s developing world.
This will require shifting the world’s $5 trillion in business-as-usual investments into green investments, as well as mobilizing an additional $700 billion to ensure this shift actually happens.
The Climate Policy Initiative estimates that we are currently at roughly $360 billion annually in public and private climate investments, with developed country governments providing somewhere between $10-20 billion per year, according to their fast-start finance reports and OECD estimates.
When you consider these figures, the $100 billion annual goal that is usually referenced is only a small piece of the $5.7 trillion puzzle. Both public and private levels of funding need sustained growth to ensure that we get on a pathway to meeting investment needs in 2020 and beyond.
WRI’s Vision of Success
Public and private actors—development financing institutions, governments, and private sector investors, including financiers and project developers—significantly shift and scale-up their investments in sustainable, low-carbon and climate-resilient development. These investments will create new markets, address long-term opportunities and risks arising from climate change, promote wider socio-economic benefits, and minimize social and environmental harm.