Climate Finance under the Paris Agreement

Climate finance under the Paris Agreement means financial support for action to reduce greenhouse-gas emissions and adapt to climate change. The Agreement requires developed country Parties to provide financial resources to assist developing country Parties, while distinguishing this binding duty from expectations concerning mobilization, allocation and reporting.

The obligation to provide financial resources

Article 9.1 states that developed countries shall provide financial resources to assist developing countries with both mitigation and adaptation, continuing their existing obligations under the UN climate convention.

• The duty covers both mitigation, which reduces emissions or enhances sinks, and adaptation, which addresses the effects of climate change.
• Under Article 9.2, other Parties are encouraged to provide or continue providing support voluntarily; their position is therefore different from the mandatory obligation on developed countries.
• The Agreement itself does not specify a fixed financial contribution for each developed country.

Mobilization and allocation of finance

Article 9.3 says developed countries should continue to lead the mobilization of climate finance from a wide variety of sources, instruments and channels. This is broader than direct government transfers, and the wording differs from the binding duty to provide resources.

• Mobilization should represent a progression beyond previous efforts, while recognizing the significant role of public funds.
• Under Article 9.4, scaled-up resources should aim for a balance between adaptation and mitigation, taking account of country-driven strategies and developing countries’ priorities and needs.
• Allocation should particularly consider countries especially vulnerable to climate impacts and with significant capacity constraints, including least developed countries and small island developing States.
• The Agreement recognizes the need for public and grant-based resources for adaptation.

Reporting and accountability

The Agreement requires developed countries to report both forward-looking financial information and information on support already provided or mobilized.

• Under Article 9.5, developed countries shall communicate indicative quantitative and qualitative information biennially, including, as available, projected public financial resources for developing countries.
• Under Article 9.7, they shall provide transparent and consistent information biennially on support provided and mobilized through public interventions.
• The global stocktake must take account of relevant information on climate-finance efforts provided by developed countries and Agreement bodies.