Climate Finance
Definition
"Climate finance refers to local, national or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address climate change."
Source: UNFCCC
Explainer
According to the Paris Agreement, climate finance is key to climate action. While there are many climate finance mechanisms, the most prominent is the 20O9 US$ 100 billion annual pledge by wealthy countries to support at-risk countries in mitigating and adapting to climate change, which has so far not been met. Furthermore, efforts such as the Global Shield, an insurance mechanism for countries affected by climate disasters announced at COP28, reflect a shift in how climate finance is understood and acted upon.