It's believed that the term "climate finance" was first used by the United Nations Framework Convention on Climate Change (UNFCCC) in 1992.
This was after the Earth Summit
in that same year, which led to the creation of the Kyoto Protocol. No one can
pinpoint when climate finance was first coined, but it is generally agreed that
it's been used since then.
The word finance appears once in the UNFCCC and the Kyoto Protocol.
This single mention of finance is paired with an already existing financial system that many could consider an early form of climate finance.
But, neither of these two documents ever referred to
these financial systems as finance.
With the 2001 Marrakesh
Accords in mind, finance briefly appeared in the text. Most frequently, this
related to changes.
According to Matthew Solomon, a Climate Policy Initiative analyst, historically and currently the biggest polluters are the ones who should receive climate funding and stop using dirty money.
They caused this environmental catastrophe and
consequently need to pay for solutions.
Even if you
release hundreds of millions of tons of carbon dioxide each year, you have the
best chance at lowering your CO2 output.
Changes in
global climate patterns take a long time to develop. This is because human
activities, such as the use of fossil fuels, contribute toward climate change.
Greenhouse
gases are released into the atmosphere once the planet has been burned. This
causes the planet's temperature to rise.
People and
countries can access climate change funding options known as climate finance.
II- Types of climate finance
Climate change mitigation
requires financial support at the local, national or international level. This
is known as climate finance.
Concrete improvements in
people's lives result from new laws caused by this influence.
These funds can come from
public, private or other sources.
Climate finance is found in
public, private and alternative funding sources. It can be represented by
national, transnational or local climate finance.
Some industries require massive funding to reduce their harmful greenhouse gas emissions.
This is because of the increased need for climate finance as we work
to tackle climate change.
Adapting to climate change requires substantial financial resources.
This is why funding
for climate finance is equally important for adapting to climate change.
Funding activities related to climate change requires understanding a wide range of concepts.
Some of these concepts include green finance, low-carbon finance and
even fusing it with other concepts like sustainable finance.
III- Climate finance in practice
The UN Framework Convention on Climate Change only officially defined climate finance in 2014.
This financial
measure aims to reduce carbon emissions, increase greenhouse gas sinks and
enhance ecosystems' resilience to the effects of climate change.
The Paris Agreement in 2015
contained 4 mentions of climate finance.
There's a small niche market for climate finance. However, the public and private sectors have started to use this practice more often.
This new development has led to many projects
taking advantage of these opportunities.
It's important for projects, programs, and organizations to consider potential funding options or adjustments now.
This is because we believe it's an opportune time to fund
projects that promote mitigation and adaptation.
Additional climate finance options are particularly useful now thanks to
the current time frame.
As climate change is a permanent shift in the weather, any finance needed for climate change is also permanent.
This includes both financing for
mitigating climate change and financing for communities and economies to adapt.
Significant reductions in greenhouse gas emissions are necessary in order to reduce global warming to 1.5 or 2 degrees Celsius.
These emissions
reductions are impossible to accomplish without immediate massive effects on
the world.
Changes to the climate have negative effects on nature, people and
infrastructure.
