Aligning global financial flows with climate targets: promoting progress in climate finance

Context

The effects of climate change are becoming more and more noticeable worldwide. Large-scale investments will be needed to successfully manage the transformation to climate neutrality, especially in emerging economies and developing countries. Financial flows and investments need to be redirected into future-proof, climate-friendly investments. To achieve the goal of ‘Shifting the Trillions’ – transforming the financial system in favour of the goals of the Paris Agreement– it is necessary to mobilise private sector capital alongside international public climate finance.

Article 2.1c of the Paris Agreement states that global finance flows need to be made consistent with a pathway towards low greenhouse gas emissions and climate-resilient development in order to limit the increase in global warming to 1.5°C and strengthen adaptation to climate change. This extends to both public and private sector financial flows.

Objective

The transformation of the financial system as envisaged by the Paris Agreement is underway. Selected emerging economies and developing countries are implementing increasingly ambitious, effective and efficient measures to mobilise private sector funding for climate financing.

Approach

The project provides policy advice on German, European and international climate finance. It also carries out pilot measures in selected cooperation countries for the implementation of Article 2.1c of the Paris Agreement.

The project works in five priority areas:

• It promotes a financial system that is aligned with the Paris Agreement.
• It advocates for Article 2.1c of the Paris Agreement at the global climate negotiations of the United Nations.
• It implements Article 2.1c in Germany and in cooperation countries.
• It supports the climate finance goals of the Paris Agreement.
• It supports innovative approaches to mobilise green private sector capital.

Last update: September 2024