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Mitigation finance

This paper considers what ‘counts’ as climate change mitigation finance, with reference to the concept of additionality, by reviewing a range of activities that can reduce greenhouse gas (GHG) emissions in the five sectors that account for the largest share of global GHG accumulation: energy, transport, industry, agriculture and water. It examines the underlying policy and regulatory complexities that will affect investment in such options and identifies a range of interventions that might support mitigation. The paper emphasises the importance of support for innovation, reforming subsidies for GHG-intensive approaches, and support to strengthen institutional capacity to manage low carbon development, recognising the political economy of mitigation. Rather than offering definitive guidance, it elaborates key concepts and approaches to support deeper interrogation and discussion of the issues at hand.