Publications

How distant December 12, 2015 now seems. All delegations at COP21 had then rallied behind Laurent Fabius’s little green hammer. Ten years later, the trend is closer to backlash. Climate action is now often portrayed in the public debate as too costly, because it requires major investment. Ineffective, since our share of global emissions is small. Unfair, because it cuts into purchasing power. Too divisive, supported only by part of the electorate. Too late, since keeping the planet below +2°C of warming now seems out of reach. Arguments that are partly true—yet require substantial nuance. 

A few weeks ago, COP30 concluded in Belém with all parties agreeing on a “global mobilization” (or mutirão) against climate change, proving that multilateralism remains a viable path for action, despite strong geopolitical and economic headwinds. However, Belém delivered underwhelming results: no roadmap to transition away from fossil fuels –despite a powerful push from President Lula, rallying over 80 countries, a lack of concrete decisions on deforestation –disappointing for an “Amazon COP”, and mixed results on the global goal on adaptation, among other outcomes.  

COP30 concluded with an agreement, proving that multilateralism is still alive. However, the results are underwhelming: no push to transition away from fossil fuels, no decision on deforestation, and mixed outcomes on adaptation metrics.  On climate finance, Belém failed to shift from ambition to implementation. Negotiations quickly drifted back to a battle on yet another high-level quantitative target. The decision to triple adaptation funding by 2035 disappointed many, with its distant time horizon, lack of baseline and non-binding wording. COP30 also missed the opportunity to engage with – and build consensus around – concrete measures outlined in the Baku to Belém roadmap to get to $1.3 trillion. Instead, it defaulted to launching new processes – a work programme on climate finance and a ministerial roundtable on the NCQG.  

Climate change does not conform to business, political or supervisory regime cycles– its adverse long-term impacts lie beyond such horizons. Ten years ago, when Mark Carney highlighted this paradox in his landmark Tragedy of the Horizons speech, climate change was not considered a financial stability risk. Today, European supervisory stress tests estimate up to €638 billion in banking losses over 8 years, while the European Central Bank (ECB) reveals that over 90% of eurozone banks face climate and environmental risks. A key question arises: Is the supervisors’ primary focus on greening the financial system sufficient in the face of rising risks, especially stranded assets? 

The climate and development finance gap is large and widening, as Official Development Assistance (ODA) declines and needs multiply. With shrinking fiscal space in vulnerable countries, solidarity levies are gaining attention as a predictable source of international finance. Launched at COP28 by Barbados, France, and Kenya, the Global Solidarity Levies Task Force (GSLTF) is the main initiative in this space.

National Public Banks (NPBs) and Subnational Public Financial Institutions (SPFIs), including development banks and agencies as well as climate and green funds at the subnational level, play an increasingly vital role in financing climate action and the just transition. While national governments provide frameworks aligned with nationally determined contributions (NDCs), actual implementation occurs largely at the subnational level, which currently lacks sufficient funding. SPFIs can work as financial intermediaries, as they not only understand local needs and have stronger ties with local governments and businesses, but also access much larger volumes of capital from more diverse sources. 

"What agreement will the negotiators reach?” is the question that is usually on climate practitioners’ minds at this time of the year. However, this time, it is a new impetus that is needed, not another agreement. 10 years after the Paris Agreement, the Brazilian COP30 presidency has rightly shifted the focus to execution, making this edition “the implementation COP.” On financing, the objectives set at COP29 are clear: developing countries should receive $300 billion per year by 2035 from developed countries (NCQG), and mobilise $1.3 trillion per year from all actors. The newly published "Baku to Belém" roadmap proposes solutions to meet the targets. We now have objectives and a list of (theoretical) means to achieve them. How do we move to implementation? 

Nearly a decade has passed since the Paris Agreement elevated finance to the heart of the climate agenda, embedding in Article 2.1(c) the ambitious goal of aligning global financial flows with low-emission, climate-resilient development. But for all the talk of “shifting the trillions,” we remain far from course. 

Financial institutions, including banking and funding institutions, have a pivotal role to play in driving low-emissions and climate-resilient development. They need to adopt practices that support climate mainstreaming in local financial systems, from committing to climate strategies to improving their climate performance. Support from development finance institutions often proves to be an enabling or even a crucial factor.

Ten years after the adoption of the Paris Agreement, what progress has been made to make financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development (the ambition set out in Article 2.1(c) of the Agreement)? And what is needed going forward? Although we still lack a comprehensive assessment of progress, this article draws on existing analysis of what can help align financial flows and examines the efforts made by governments and the financial sector to this end. It highlights a development in the debate towards a country-driven approach and a focus on real investment needs. It explores ways to overcome existing barriers to action despite a challenging global context. The article advocates that Article 2.1(c) should be viewed not as a stand-alone provision, but as something that requires full implementation of all the provisions of the Paris Agreement. It also calls for a shift from a target-focused to an action-focused finance agenda and discusses how the COP30 in Belém can contribute to this.

This year marks an important milestone for I4CE: we are celebrating a decade of commitment to the climate economics. We would like to thank our partners who agree to say a few words at the occasion of this anniversary.  

This year marks an important milestone for I4CE: we are celebrating our 10-year anniversary. Setting sails the year the Paris Agreement was adopted, our mission was clear from the outset: to promote effective, efficient and fair policies for the climate transition.  Since then, we have focused our economic analysis on public policies with an emphasis on assessing the investment needs and policy options for the transition. Our ambition has been to advance the public debate on climate with facts and figures, promoting long-term investment plans as an essential tool to turn political ambitions into reality. Over the years, we have applied this approach to a growing number of policy areas and expanded our geographical scope from France to Europe and internationally.

With the dust settling from COP29's hard-fought negotiations on the New Collective Quantified Goal (NCQG), attention is shifting to how the climate finance goal will be met. The challenge is how to scale up financing for increasingly connected priorities in a challenging landscape of debt stress and cuts in official development assistance.

The 4th International Conference on Financing for Development (FFD4) in Seville represents a milestone for delivering on development (including climate action) goals, a decade after the adoption of the Sustainable Development Goals and the Paris Agreement. The “Seville Commitment” was adopted on June 30th, albeit in the absence of the United States – demonstrating that widespread support remains for a comprehensive package to finance development. However, the outcome also embodies the growing chasm between high-level commitments and the reality of financing for development and climate action on the ground. Recent research by I4CE attempts to bridge this gap on two crucial issues. 

As climate finance debates evolve from pledges to implementation, this report critically reviews the methodologies and narratives behind existing climate financing needs estimates to examine how they might be used to guide practical efforts in the years to come, and where the most urgent improvements are needed. From headline trillions to actual millions, the challenge ahead is not just about determining how much is missing – the focus should be on closing this gap in practice.

Climate negotiations are taking place next week in Bonn, with finance once again high on the agenda. COP 29 ended last year with a New Collective Quantified Goal (NCQG) –revised climate finance target to replace the USD 100 billion goal. The NCQG decision put forward a commitment by developed countries to lead in providing USD 300 billion per year by 2035 for developing countries, as well as a proposal to work on a roadmap to scale up climate finance for developing countries to reach a level closer to the estimated needs –the ‘Baku to Belem Roadmap to 1.3T’ (USD 1.3 trillion). The latter must be delivered at the end of the year at COP 30, and strong efforts are being put in the task by the Brazilian Presidency.

This 2025 edition of the Global Carbon Accounts presents a landscape of carbon pricing instruments through the lens of their current and potential contribution to scale up climate and development finance. Several jurisdictions are already using carbon revenues to support a range of policy objectives, including decarbonization efforts and support for economic actors most affected by the transition. Yet there is still potential for them to further contribute to fill the gap.

This report aims to support better use of financial intermediation by public development banks (PDBs) providing international development finance, helping PDBs work better together as a system, with a common understanding of where they contribute the most to low-emissions and climate-resilient development. It mainly focuses on financial intermediation through on-lending to public (government-owned) financial institutions in developing countries.

We are witnessing a withdrawal of commitments to climate action. In the US, President Donald Trump does not hide his hostility to what he calls the ‘climate hoax’. In Europe and in France, new narratives around competitiveness, strategic autonomy and security are gaining ground, reflecting a new political reality. If there is still a broad consensus on the long-term objective of climate neutrality, how to get there is increasingly challenged, generating uncertainty. The scarcity of fiscal resources impacts the willingness to embark on the green transition.

On his first day in office, Prime Minister Mark Carney announced the elimination of the consumer carbon tax, in response to political pressures rather than evidence-based concerns about its effectiveness or impact on affordability. The tax had played a crucial role in reducing the country’s GHG emissions, and along with other carbon pricing policies, was expected to contribute nearly half of Canada’s emissions reductions by 2030. Additionally, the majority of revenues collected were redistributed to citizens, protecting vulnerable households. Thus, without alternative policies to compensate, eliminating the tax could slow emissions reductions and increase inflationary pressure, particularly for low- and middle-income families who benefited financially from the Canada Carbon Rebate funded by the tax.