What is Climate finance?

Broadly speaking, climate finance relates to the money which needs to be spent on a whole range of activities which will contribute to slowing down climate change and which will help the world to reach the target of limiting global warming to an increase of 1.5°C above pre-industrial levels.

To reach this goal, the world needs to reduce its greenhouse gas emissions to practically zero by 2050; the phrase net-zero is also heard a lot in the context of financing climate action.

Initiatives that must be financed to reach net-zero, include those which reduce emissions of harmful gasses as well as enhancing or protecting the natural solutions which capture those gasses, like forests and the ocean.

The finance also aims to build the resilience of populations most affected by climate change and help them to adapt to changing climatic conditions, measures which in turn will help to reduce warming.

The finance exists and so do the solutions, to transition to what the UN calls a green economy. Renewable energy which provides electricity without producing carbon dioxide or other forms of air pollution is a crucial building block for powering sustainable economic growth.