Global climate finance approached USD 1.3 trillion on annual average in 2021/2022 compared to USD 653 billion in 2019/2020. Most of this growth is due to an increase in mitigation finance, with the largest growth in the renewable energy and transport sectors.
However, growth is not sufficient nor consistent across sectors and regions The growth in global climate finance largely results from significant increases in clean energy investment in a handful of geographies. China, the US, Europe, Brazil, Japan, and India received 90% of increased funds. While this marks promising progress, large climate finance gaps remain even in these geographies, and climate finance in other high-emissions and climate-vulnerable countries has shown meager progress in meeting their needs.
The context in which climate finance is being mobilized is evolving rapidly. Multiple ongoing crises vie for political and financial attention, while raising the cost of capital. Yet, the pressure to turn climate commitments into deployed climate finance, both public and private, is growing on all fronts.
CPI proposes a series of priorities to accelerate climate finance deployment and create real economy impact.