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SEI brief

Estimating international mitigation finance needs: A top-down perspective

This discussion brief reviews and distils the findings of key global studies that have sought to gauge mitigation finance requirements.

Michael Lazarus, Kevin Tempest / Published on 24 November 2014
Citation

Tempest, K., and M. Lazarus (2014). Estimating international mitigation finance needs: A top-down perspective. SEI discussion brief.

In the run-up to the UN Climate Change Conference (COP20) in Lima, Peru, several countries have made substantial pledges to the Green Climate Fund, which is expected to become a primary channel for international finance for mitigation and adaptation in developing countries. By most estimates, however, current and pledged climate finance falls far short of what is needed, particularly if emissions are to be kept at levels consistent with a warming trajectory of no more than 2°C.

This gap in mitigation finance concerns both global investment needs and “North-South” financial commitments to assist in the deployment of low-carbon technologies in developing countries. The COP in Lima provides a forum to start crafting international agreements on climate finance in preparation for the post-2020 agreement to be approved at COP21 Paris next year. This process may be more effective if it is informed by reliable estimates of investment needs globally, in the developing world, and in individual countries, so that countries can set their ambitions for increased climate finance appropriately.

This discussion brief, adapted from a memo prepared for Oxfam International, reviews studies that have estimated finance needs for climate change mitigation, as well as current finance levels. In addition to the estimates they provide at the global and regional levels, these studies can provide “top-down” perspectives on national finance requirements that can complement the “bottom-up” estimates developed at the country level.

While country-specific studies are invaluable, reflecting unique opportunities and constraints, they can also be difficult to compare across countries. Individual global studies, in contrast, can provide some level of consistency in assumptions, approaches, and estimates across countries and regions – though as noted below, the ability to downscale to all but the largest countries is quite limited.

Download the discussion brief (PDF, 1MB)

Note: The PDF was replaced on 25 November to correct a labelling error on Figure 2. 

SEI authors

Michael Lazarus
Michael Lazarus

Center Director

SEI US

Topics and subtopics
Climate : Mitigation, Finance
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