Climate change is a defining challenge for government policy makers and our societies. What was once mainly considered an environmental issue now has existential economic and security implications.
Over 190 countries have signed the 2015 Paris Agreement, which establishes a global framework for combating climate change. The Agreement sets out two fundamental and innovative goals for government climate policies. First, governments set for the first time the clear objective of less than 2 degrees Celsius warming, with the stretch objective of 1.5 degrees. In the years since the Paris Agreement was signed, the need to limit warming to 1.5 degrees has become even stronger. In recent years, more than 130 countries have announced their ambitions to reduce emissions to net zero with many setting legally binding targets.
Second, governments expressly agreed on the objective to make “finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”. Paris Agreement, art. 2.1(c). This core objective, set out in the same article as the temperature goals, has two elements – a focus on finance flows and the aim to align them to low emissions. Art. 2.1(c) is the orienting goal for a concerted effort to align “all forms of finance – public and private, domestic and international – and all instruments”, as underlined by the recent Report of the Independent High-Level Expert Group on Climate Finance.
