Publications

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.  

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. 

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.

We were proud to contribute to the inaugural Paris Climate & Nature Week hosted by Sciences Po from 27 to 29 October, marking the 10 years of the Paris Agreement. I4CE weighed in on some of our core topics– lessons learnt over the past decade of climate action which can accelerate the  transition; the links between climate and development finance; as well as adaptation and the cost of inaction.

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. 

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.

Next week, representatives of public development banks and their stakeholders will gather in Cape Town for the 5th Finance in Common Summit (FiCS), to discuss how public development banks can align all their activities with the Sustainable Development Goals, the Paris Agreement, and the Global Biodiversity Framework. As the global network of public development banks, Finance in Common represents about 10% of total global development investments each year, which must all align with sustainable development pathways. This year, the discussions at FiCS will take place while South Africa hosts the first meeting of the G20 Finance Ministers and Central Bank Governors, with a focus on solidarity, equality, and sustainability.

2025 is a pivotal year for the interlocking global agendas of climate and sustainable development, highlighted by major convenings such as the 5th Finance in Common Summit (FiCS), the 4th International Conference on Financing for Development (FfD4), the G20 Summit under South Africa’s presidency, and the UNFCCC COP30. Public development banks (PDBs) will feature prominently across these events, given their integral role in implementing these critical agendas through financial support and stakeholder mobilization.

This coming Monday will see the start of COP29 – formally the 29th session of the Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC), in Baku, Azerbaijan. The edition is nicknamed “the finance COP” and is important on more than one account, not least as Trump's victory likely leads to a change of course for the US on climate commitment. The volume and structure of the finance mobilised to support developing countries to transition to low-emission and climate-resilient economies tops the agenda.

This autumn’s busy negotiation agendas, offer a window of opportunity to move the reform of the international climate finance architecture (IFA) up one level. This acceleration is urgent if we want to keep pace with the dramatic change in scale needed to finance the climate transition.  In 2023, developed countries announced that they had - for the first time since 2009 - achieved their USD 100bn/year climate finance target to support climate action in developing countries. Just two years later, this target is already obsolete, with needs for emerging and developing economies (excluding China) estimated at around USD 2.4 trillion per year by 2030. 

Options for Public Development Banks. Since the adoption of the Paris Agreement in 2015, several public development banks (PDBs) have responded with structured approaches to align their operations with the Agreement’s expectations (as described in Section 1). However, many PDBs, particularly those in emerging markets and developing economies, are yet to adopt an approach to align with the Paris Agreement (i.e., Paris alignment). As entities whose investment mandates are established by the Parties to the Paris Agreement (i.e., national governments), PDBs have specific obligations derived directly from these Parties’ commitments to act across all policy and regulatory frameworks under their jurisdictions, including for state-owned or state-mandated institutions and agencies. Accordingly, PDBs are expected to operate in a manner that supports the achievement of the Paris goals. More specifically, they are obligated to integrate their activities within the Agreement’s implementation mechanism by providing financial, technical, and capacity building support that is entirely consistent with national low-emission climate-resilient development pathways.

Rethinking how development can be financed to take into account the rising challenges of our time is a fastidious task, especially when thousands of experts, decision makers and practitioners want to leave their print. The outline of the new international financial architecture is being debated again this week, with more questions open for discussion than consensus on the answers. 

Since the Paris Agreement in 2015, significant strides have been made to foster the commitment of countries and financial institutions to address the climate crisis and ensure that climate risks and opportunities are considered in investments. However, with emissions required to peak before 2025, our window of opportunity is rapidly closing to keep +1.5°C within reach. Financial needs to lower greenhouse gas (GHG) emissions and to address adaptation priorities are increasing rapidly in the meantime. Luis Zamarioli Santos and Diana Cárdenas Monar, from I4CE, believe that commitment must urgently translate into action, and action must bring the urgent change the world needs. Both governments and public financial institutions have a central role to play to deliver more and better finance, maximising positive impacts. This blogpost highlights some opportunities to advance in the path for a systemic transformation, involving key stakeholders with a whole-economy approach.  

At the Spring Meetings, during an event with senior climate representatives from Multilateral Development Banks, I4CE, E3G, Germanwatch and NewClimate Institute officially launched a common position paper on what ambitous Paris alignment means for public development banks. This paper summarises years of research on Paris alignment to shed light on best practice and hopefully support decision makers in taking and implementing credible climate commitments. 

A couple of months ago, COP28 called for the acceleration of efforts “towards the phase-down of unabated coal power”. Limiting temperature rise to 1.5°C requires stopping the construction of new coal power plants, that’s for sure. But it also requires retiring existing plants before the end of their lifetimes, which can be more challenging. Public development banks (PDBs) are well-positioned to help overcome barriers to coal phase-out and support countries with the transition to decarbonised electricity systems. A growing number of these banks are exploring strategies to accelerate the early retirement of coal plants. Yet these efforts may carry risks of unintended adverse impacts.

Public development banks have the potential to facilitate the transition from coal to renewable alternatives in developing and emerging countries by fostering conditions conducive to the early retirement and repurposing of coal plants. Co-written with NewClimate Institute, this report highlights the challenges associated with the early retirement of coal plants and examines public development banks' role in collaborating with national governments and power producers to support coal phase-out. 

With their historical role in funding coal capacity and public mandate, public development banks have a crucial role in enabling coal phase-out. Co-written with NewClimate Institute, this short paper explores many of the risks associated with proposals for abatement technologies and carbon credits as an input to current discussions on early coal retirement. 

COP28 in Dubai kicks off amidst a worrying climate backdrop. For the first time, the threshold of a 2°C temperature rise compared to the pre-industrial era was exceeded in one day. In addition, a report published by the UN this week warns that current policies are placing the planet on a warming trajectory of 2.9°C, and that the chances of maintaining the increase at +1.5°C are now of only 14%. The results of the first Global Stocktake, a worldwide assessment of the actions taken by countries since the Paris Agreement, will be published at the COP and should confirm the urgent need to change the trajectory of greenhouse gas emissions.