Paris Agreement Investment Gap

In 2013, the World Bank, a CCAC partner, explored how it could integrate short-lived climate pollutants into its operations. It analyzed 52 of its US$228 million CO2 reduction projects and found that, for an investment of approximately US$543 million for these projects, $228 million is generated by the nearly 375,000 tonnes of methane emissions that are avoided each year. Since then, the Bank has increased its share of climate finance each year. In fiscal 2018, the World Bank reached a record $20.5 billion in climate finance and committed to increasing its share of climate-related lending from 21% to 28% by 2020. Investors can evaluate a project based not only on financial results, but also on social results. Indeed, when it comes to financing climate, the return on investment should be defined not only by money, but also by improving people`s lives. An IFC report released in November shows that the historic global climate change agreement adopted in Paris has helped open nearly $23 trillion in investment in emerging economies by 2030. „This is an important wake-up call for the industry,“ said Stefen Shin, AIIB Principal Investment Officer, Capital Markets and Structured Products. „For climate finance to become the mainstream, Asia must now be fully involved. Last year, the EIB announced that it would increase its investments in climate change and environmental protection to 50% by 2025, up from around 30% currently. The EIB Group will set a target of supporting investments of EUR 1 trillion in climate change and environmental sustainability during the crucial ten years 2021-2030.

After 2021, they will no longer fund traditional fossil fuel projects, including natural gas, or other projects incompatible with the paris agreement`s objectives. In the energy sector, the global energy transition would require investments of nearly $22.5 trillion in new installed renewable energy capacity by 2050. This would represent at least a doubling of annual investment from the current level, from nearly $310 billion to more than $660 billion. As part of GGGI`s current efforts to increase green investment flows and improve multi-directional knowledge exchange and learning, this report will be the first in a series of studies on how to make climate projects sustainable.