On average in 2019/2020, no less than €650 billion was raised and invested in climate finance with a high share allocated to mitigation of climate change effects.
While the growing trend in funds is noteworthy, it is also relevant to highlight that compared to the target to be reached in 10 to 30 years, we are somewhere between 10 and 20% of the necessary levels.
This is part of the findings by the Climate Policy initiative, an analysis based on the 1.5-degree scenarios of the Intergovernmental Panel on Climate Change (IPCC).
The study incorporated the significant variability that could exist in the analysis influenced by several factors such as low energy scenarios, low growth scenarios, high growth scenarios, high population scenarios.
The analysis also took into account the assumption that the world will use 8% less energy than today to serve an economy twice as large and a population of 2 billion more. The following observations can be made:
Some items are better known and better funded, such as renewable energy. Indeed, we are 28% of the way to achieving the level of spending on renewable energy infrastructure needed to align with the 1.5-degree target.
Some areas are receiving less attention, such as industry, waste and water, and agriculture, forestry and land use. For these segments, only 3-6% of the financing needs have been met so far to reach the 1.5-degree target.
Although these segments are slightly smaller in scale, they have real potential given the contribution of industry to greenhouse gas emissions and the role of land that will be needed to serve as carbon sink.
Energy systems will have to run on clean energy, infrastructure will be built to meet net zero standards and the conditions will be created for agriculture and land use to increasingly become carbon sinks. Finally major investments will also be needed in energy efficiency, combined with resource efficiency and behavioural changes.
