New York City, USA - December 20, 2018: Ravenswood Generating Station located in LIC (Queens) early in the morning. View across East River from Roosevelt Island.
Reinventing Climate Finance
A holistic view of climate finance to drive decarbonization.
High angle shot of a couple calculating their finances together at home
What Does it Mean to Reinvent Climate Finance?
To date, climate finance goals have been narrowly framed in terms of volumes of “clean” financial flows to activities that reduce greenhouse gas emissions. But to really understand how much climate finance we need and where we need to spend it, we also need to think about the “dirty” financial flows that contribute to emissions, the global economy’s existing emissions-producing capital stock, and investing in transformative technologies.
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Why Reinvent Climate Finance?
Although the Paris Agreement ushered in a new era of nationally determined climate action, it failed to shift the discourse on how to finance that action effectively. If we are to achieve the decarbonization the Paris Agreement calls for by 2050, we will need a new approach to climate finance that accounts for and incentivizes effective long-term mitigation outcomes and investments in solutions with transformative potential.
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Why it Matters
Continuing to set international climate finance goals based only on green flows will not result in the emission reductions we need. If we are to drive change quickly enough to stay in a 2°C (or better) world, we need to prioritize activities that retire the capital stock while supporting transformative clean technologies that can affordably replace them.
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What We're Doing
RMI published "Reinventing Climate Finance: Four Levers to Drive Capital Stock Transformation" to demonstrate how green flows, brown flows, capital stock turnover, and capital stock efficiency all need to be considered in moving the needle on climate action. RMI is continuing to provide thought leadership on how to reorient and redefine climate finance to drive deep decarbonization.
Reinventing Climate Finance: Four Levers to Drive Capital Stock Transformation—2018
How Private Finance is Moving the Needle on Climate Action
Net Climate Finance: Reconciling the Clean and Dirty Sides of the Finance Ledger—2017
What Salad and Ice Cream Tell us About Climate Finance—2017