How Paris became the capital of climate finance

How Paris became the capital of climate finance

On 12 December 2015 the Paris Agreement on Climate Change reached its conclusion. From the beginning, money has loomed large in global climate negotiations, focusing on two tightly interlinked questions: first, how to raise the capital needed to decarbonize the global economy, one that is also protected from the impacts of a disrupted climate; and second, who should pay for this transition both within and between nations?

This time around, the matter of finance also dominated proceedings at Paris, but with new dynamics in play. The outcome was a package of commitments and pledges that straddled both the traditional government negotiations and the wider financial system. As a result, the future of world finance will now need to be looked at afresh in the context of cutting net emissions from fossil fuels to zero this century - a huge goal, but one that could help renew the underlying purpose of the financial system: to serve society’s greatest ambitions.

This working paper traces the evolution of the '€˜networked solution'€™ to finance that came together at Paris, linking the formal negotiations with a broader set of actions by financial regulators, by financial institutions and also by civil society. It explores the creative dynamic between France'€™s efforts to stimulate action within its own domestic financial system, and the international steps harnessing the financial system for climate security.  t closes with reflections on how this new approach can be deepened in the year ahead.

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