Abstract:

To contribute to the fight against climate change, the MDBs have to date largely operated under what we refer to as a Climate Finance Paradigm. That paradigm involves defining, tracking, and maximizing the amount of climate finance that MDBs provide and mobilize. Climate finance has been important to moving toward global climate goals and will continue to be vital going forward. However, given the urgency of the challenge and the rate at which the world must reduce emissions, the current paradigm is not enough. A different paradigm is needed, a Paris Alignment Paradigm that builds on the successes of the Climate Finance Paradigm but that also makes full use of the MDBs’ capacity to advance Paris Agreement implementation. This involves not only maximizing volumes of climate finance, but also gradually bringing the rest of the MDBs’ pipelines and portfolios into alignment with the requirements of the Paris Agreement.