Climate finance is critical to addressing climate change because of the large-scale investments that are needed to transition to a low-carbon global economy and to help societies build resilience and adapt to the impacts of climate change.
Climate finance can come from different sources, public or private, national or international, bilateral or multilateral. It can employ different instruments such as grants and donations, green bonds, debt swaps, guarantees, and concessional loans. And it can be used for different activities, including mitigation, adaptation, and resilience-building.
Some multilateral funds that countries can access include the Green Climate Fund (GCF), the Global Environment Facility (GEF), and the Adaptation Fund (AF).
High-income countries with a significant historical contribution to climate change have committed to raising US$100 billion every year to fund climate action in low-income countries. However, this target has not yet been reached and more funding is required for both mitigation and adaptation interventions.