Abstract:

Nationally determined contributions (NDCs) are critical for global efforts to limit global warming to 1.5°C and enhance climate resilience. Implementing NDCs will require rapidly increasing financial flows to support climate goals. While only 60 percent of these countries reported on financial need in their NDCs, the combined amount still reaches $4.3 trillion, or roughly $430 billion per year—four times the $100 billion pledge made by developing countries. This report covers three stages of the process of financing NDCs: planning, implementation, and monitoring. It provides a menu of instruments available to governments as they seek to finance their NDC targets, and it highlights some of the benefits and challenges associated with each option. Many countries—especially in the Global South—struggle to find the human and financial resources required to develop and implement new finance initiatives. Political dynamics and a perceived trade-off between climate and development also hinder rapid action in many places. These challenges will not be solved by one solution alone. They will require a mosaic of actions that together allow countries to channel finance towards increasingly ambitious climate targets.