Climate finance

Climate finance is public and private funding directed toward reducing greenhouse-gas emissions or adapting to climate change. It includes domestic and international flows, grants, loans, equity, and other financial instruments.

Green Climate Fund: A multilateral fund established under the UN Framework Convention on Climate Change to support climate action in developing countries. It channels international climate finance through grants, loans, guarantees, and equity.
United Nations Framework Convention on Climate Change: The 1992 treaty that established the central international framework for addressing climate change. It established developed countries’ commitments to provide financial support to developing countries.
Climate change mitigation: Human actions that reduce greenhouse-gas emissions or increase their removal from the atmosphere. Mitigation finance supports technologies and projects that cut emissions.
Climate debt: A framework asserting that wealthy, high-emitting countries owe compensation for their disproportionate contribution to climate change. It frames climate finance as repayment or compensation rather than discretionary assistance.
New Collective Quantified Goal on Climate Finance: The post-2025 climate-finance goal negotiated by parties to the Paris Agreement. Its scale, contributors, and accounting rules define the next international finance commitment.
Adaptation Fund: A fund established under the Kyoto Protocol to finance concrete adaptation projects in developing countries. It directs climate finance specifically toward reducing vulnerability to climate impacts.
Kyoto Protocol: A 1997 treaty under the UN climate convention that set binding emission-reduction targets for many developed countries. Its Clean Development Mechanism generated proceeds for the Adaptation Fund.
Climate change adaptation: Adjustments in human or natural systems that reduce harm from actual or expected climate impacts. Adaptation finance funds measures that limit vulnerability and climate-related losses.
Carbon pricing: A policy approach that assigns a cost to greenhouse-gas emissions through taxes or tradable permits. It creates incentives and revenue, but is distinct from direct climate-finance flows.
Additionality: The requirement that a funded action produce outcomes beyond what would have occurred without the intervention. Climate-finance debates ask whether reported support is genuinely additional to existing aid.

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