Now is a critically important time for the world to focus on climate finance. Developing nations—those least responsible for causing global warming but most vulnerable to its impacts—need funding to adopt clean energy, protect infrastructure from sea level rise, and engage in other adaptation and mitigation strategies. But these activities are costly—the world will need to figure out how to fund them now in order to protect countries from future climate change.

The problem is that it’s hard to draw attention to a topic that’s difficult to understand. The issue of climate finance is decidedly complex. Several entities--think-tanks, banks and other financial institutions, international institutions, governments, and public sector agencies--are involved in myriad activities related to climate finance. Understanding how they operate, interact, and contribute can be confusing. Even the vocabulary that defines climate finance can be inconsistent, abstract, and nebulous at times. These complexities make climate finance an issue that’s hard for people--even experts, sometimes --to wrap their heads around.

Introducing the Climate Finance FAQs Series

That’s where WRI’s new blog series, Climate Finance FAQs, comes in. Our experts will attempt to shed light on basic climate finance issues through a series of blog posts. By explaining these topics in plain language, we can make climate finance more accessible--and hopefully, draw broader attention to the pressing issue of how to pay for climate change mitigation and adaptation.

Some of the questions we seek to answer in the beginning of this series include:

  • Why is climate finance so hard to define?
  • What is a climate investment?
  • What role should the private sector play in climate finance?
  • What do we mean by “leverage” or “mobilization”?

Over time, the series will cover a wide range of climate finance FAQs.

WRI's Climate Finance Work

Stabilizing the global climate in the 21st century will require major financial investments to transition the world’s economy onto a low-carbon path. WRI is addressing how these massive investments toward a low-carbon and resilient economy--which we refer to as climate finance--can be realized. Visit our Climate Finance webpage for more information on our related projects, publications, and resources.

The Global Context

It’s a good time to address these questions and provide greater clarity. Experts estimate that an additional $700 billion will be needed to “green” the business-as-usual investment in the global economy. So far, developed nations have only committed to contributing $100 billion a year. The next few years will determine how the international community plans to bridge that gap.

At the same time, the Green Climate Fund, which is poised to become the main channel for distributing global climate finance, is being designed. It’s more important than ever before that the media, governments, business leaders, and civil society are on the same page when it comes to climate finance.

We Want Your Help

The questions outlined above are what we believe to be some of the most common queries when it comes to understanding climate finance. But we’ll also be relying on you to tell us what you want to know.

Please ask your own climate finance questions in the comments section below, or email Shally Venugopal at We’ll do our best to answer your queries and add to this series. We hope that by fostering a greater understanding, we’ll help others recognize climate finance as one of the issues that could make or break the world’s ability to take action on climate change.