Shifting the global economy onto a 2°C trajectory implies a rapid shift of existing investment patterns and far reaching transformation in technology, infrastructure and practises, including the adoption of new financing and business models. A key challenge for developing countries is how to develop a national climate agenda that is fully integrated with development objectives so that the new paradigm balances social, economic and environmental objectives. This will be critical to ensuring a steady transition which will also be influenced by the structure of the economy and the wider political economy, existing institutional frameworks and priorities, domestic capacity and perceived risk for managing processes of change.

“National Financing Pathways” are put forward here as a concept that articulates the interdependencies between public, private and international sources of finance as a means of delivering scaled investment to support implementation of low emission and climate resilient development. The interplay between national policy objectives and institutional frameworks with various sources of finance can be considered as constituting a national finance ecosystem and so influencing the shape and pace of the financing pathway. Based on discussions with representatives in Chile, Colombia and Peru, this working paper, Financing Pathways for Low Emissions and Climate Resilient Development, identifies emerging issues that may influence a NFP and considers different frameworks and tools to develop such pathways.

Further reading:

Project homepage: National Financing Strategies for Implementation of Low Carbon Development Strategies