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2014

The Landscape of Climate Finance

The most comprehensive inventory of climate change investment available.

A project of Climate Policy Initiative.

2011
2012
2013
2020
$364 bn
2011
$359 bn
2012
$331 bn
2013
We need

at least

$5 trillion...
additional investment for clean energy alone, up to 2020 *Source: IEA
How does that compare to what's needed? Click to find out. Click here

Global climate finance totaled
$331 billion in 2013, dropping
for the second consecutive year.

We’re falling further and further behind the globally agreed upon goals for safe emissions levels.

If we are going to close the gap, we've got to know how finance is flowing now.

Scroll down to see to see who are the important actors

Who are the important actors in climate finance?

The private sector provides the majority of climate finance.

Private finance fell by 14% compared to the previous year.

The public sector plays a key role, bridging viability gaps and covering risks that private actors are not able or not willing to bear.

Public finance maintained the same level.



$193 bn
2013
$193 bn
$224 bn
PRIVATE
2013
2012
Click here

Click to see 2012 figures.

$331 bn

TOTAL FINANCE

58%
PRIVATE
42%
PUBLIC
62%
PRIVATE
38%
PUBLIC
Click here
$137 bn
2013
$137 bn
$135 bn
PUBLIC
2013
2012
Scroll down to see fossil fuel subsidies

These public measures for climate change are significant, but remain dwarfed by government support to fossil fuel consumption.

$544 bn
PUBLIC FINANCE FOR
FOSSIL FUELS
*developing and emerging economies alone, source
IEA
vs
$137 bn
PUBLIC
CLIMATE FINANCE
Scroll down to see why climate finance is falling

Why is climate finance falling?

Most of the decrease comes from falling solar PV prices.

In 2013, INVESTMENT in solar fell by 14% to $117 bn.

But DEPLOYMENT increased by 30% to 40GW.

INVESTMENT DEPLOYMENT 2013 2012
Scroll down to see where climate finance is being spent

Where is climate finance being spent?

Climate finance flows are split almost evenly between OECD and non-OECD countries.

* Due to data constraints we were
not able to allocate 2% of climate finance

$331 bn
2013
Click here
$165 bn
50%
OECD*
$164 bn
50%
non-OECD
Scroll down to see where climate finance is flowing to

Where is climate finance flowing to?

74% of climate finance is used in the country in which it originates.

90% of private investments were made in the country of origin.

$331 bn
TOTAL CLIMATE FINANCE
2013
Click here
$244 bn
74%
$86 bn
26%

26% of climate finance flows between countries.

Domestic policy frameworks are critical drivers of investment particularly from the private sector.

Scroll down to see flows between countries

Flows between countries

$34 bn of finance flowed from developed to developing countries.*



This is 20% less than last year.

NON OECD 44 OECD 41 NON OECD 12 OECD 73 NON-OECD OECD $73 bn $12 bn NON-OECD OECD SOURCE DESTINATION $41 bn $44 bn $39 bn $34 bn $10 bn $2 bn
*Data gaps and lack of agreement on which flows should count toward the 2020 target to mobilize $100 bn annually in developing countries prevent a direct comparison between our findings and this figure.
Scroll down to see key findings

We are falling further behind investment levels needed to meet globally agreed temperature targets

Countries around the world are investing in a lower-carbon, cleaner, more resilient economy. Climate finance flows are split almost evenly between OECD and non-OECD countries. However, we are falling short of investment required and the investment gap is growing. Last year’s fall was mainly due to a significant fall in private investments in renewable energy, which dropped in every region apart from Japan – a trend that cannot continue if temperature goals are to be achieved.

Less finance can be good news if it achieves more

Around 80% of the sharp fall in private investment came from falling costs for some renewable technologies (particularly solar PV) where efficiencies are increasing and unit costs are coming down. In some areas, less finance is doing more. If investment costs of solar power had remained the same in 2013 as in 2012, the 2013 solar deployment would have resulted in an increase of USD 12 billion in global climate finance flows rather than a decrease of USD 28 billion. Policymakers should not just focus their efforts on mobilizing finance but also on decreasing technology costs.

Public climate finance remains a key contributor and driver of private investment

In the absence of a strong carbon price, it bridges viability gaps and covers risks that private actors are unable or unwilling to bear. Despite data gaps for private investment in energy efficiency and climate adaptation measures, it remains significant that almost all of the developed to developing country finance we capture came from public actors.

Domestic policy frameworks are critical drivers of investment particularly from private investors

Our analysis shows three-quarters of investment originated and was spent in the same country. Private actors spent 90% of their investments in the country of origin. Getting domestic policy frameworks right is of paramount importance for policymakers.

Climate finance tracking has improved but big gaps remain particularly in terms of understanding effectiveness

We lack crucial information about domestic public climate budgets, private investments in adaptation, forestry and transport. In addition, estimates for private investments in energy efficiency do not allow us to track investments to a project level. To advance this knowledge, better and more consistently applied methodological approaches across these sectors are required as is transparency on a project level.

To put climate finance estimates into perspective, we need comparable estimates of trends in high-carbon “brown”, or business-as-usual, finance. This will enable us to track whether there is real progress towards a low-carbon, climate-resilient future and identify opportunities to shift financial resources towards more sustainable uses.

Finally, while our understanding of how to use finance effectively is improving, this knowledge is scattered, across projects, technologies and regions. We still miss a systematic understanding of how effectiveness can be ascribed to different parts of the climate finance landscape. Filling data gaps and sharing experiences will help us to improve the picture.

Key findings


  • Click hereWe are falling further behind investment levels needed to meet globally agreed temperature targets
  • Click hereLess finance can be good news if it achieves more
  • Click herePublic climate finance remains a key contributor and driver of private investment
  • Click hereDomestic policy frameworks are critical drivers of investment particularly from private investors
  • Click hereClimate finance tracking has improved but big gaps remain particularly in terms of understanding effectiveness
(*) Click on each lesson to view more information.
Scroll down to explore the data further

Explore the data

Scroll down to see CPI Landscape Work

CPI climate finance mapping

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