Climate Finance at COP21 and After: Lessons Learnt

Finance has emerged in the last few years in and outside the Conference of the Parties (COP) process as a key ingredient of climate policy design. It also appears to be a key sector for structural reform in order to align it with the new low-carbon horizon. This policy brief draws lessons from a discussion platform launched jointly by CEPII and France Stratégie, which welcomed more than thirty contributions on climate finance issues from various experts and citizens in the four months leading to COP21. Both these contributions and the final text adopted by the Parties indicate that the financial question will remain essential in the near future in order to consolidate and nurture the Paris Agreement. In this brief, three directions for future debates are analyzed. First, the equity question remains open, through the financing schemes to guarantee a minimum of $100 billion in annual transfers to developing countries in the name of the principle of “common but differentiated responsibilities”. The question of an increasing ambition to implement the “Intended Nationally Determined Contributions” through specific financial instruments is also discussed. Finally, the necessary long-term objective of a net decarbonization of the world economy invites us to look for more structural reforms in the financial sector.