Writing Prompt: Finance in Long-term Strategies


The Paris Agreement indicates that national strategies should consider matters of finance. According to Article 4.19 of the Agreement, all Parties should strive to create long-term strategies “mindful of Article 2.” This article in turn states that Parties aim to act on climate change by “[m]aking finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development” (Article 2.1(c)). The question now is: How should long-term strategies consider the topic of financial flows? The aim of the expert perspective will be to investigate this question.

The following questions can be used as a guide to explore the topic.

Research Questions

What finance-related categories of information should a long-term strategy include? Financing the transition toward low-carbon economies will require a multi-pronged approach tailored to national circumstances. Countries will need to grapple with finance in a variety of ways. For example, they may need to access finance to pay for NDCs, support a shift in finance away from activities that are not compatible with a low-carbon future, and provide funding to other countries as part of their ‘common but differentiated responsibilities.’ The expert perspective should outline the main finance-related topics that countries should explore in their long-term strategies. 

How should countries plan for and report on financing for their long-term mitigation (and adaptation) goals? Financing for implementation of the country’s NDC and long-term strategy will come from a variety of sources depending on the country’s economy, political and natural environment, level of development etc. For example, a government may implement fiscal or regulatory policies to help mobilize finance for climate-compatible technologies. Or it may wish to seek finance from international funds dedicated to supporting climate change mitigation or adaptation. The Expert Perspective should explore some of the options available to countries for financing their long-term goals, and methods for reporting on these options in long-term strategies.  

What type of actions may countries undertake to make all financial flows consistent with climate-compatible development (Article 2.1(c))? The language of Article 2 infers that countries should work to ensure that all financial flows support climate-compatible initiatives. This goes beyond financing long-term climate goals to ensuring that money does not flow toward activities that are incompatible with a low-carbon, climate resilient future. The expert perspective should look at what it may mean to implement Article 2.1(c) and how implementation of the article can be integrated into long-term strategies.   

How should the role of finance in long-term strategies differ between developed and developing countries? Developed and developing Parties to the UNFCCC have different responsibilities under the Paris Agreement when it comes to finance. How should this be reflected in long-term strategies? Should developed countries report on how they are supporting the transition of developing countries, including through capacity building? If so how? The expert perspective should investigate whether the finance elements of long-term strategies should differ between developed and developing countries and, if so, what that difference may look like.