It's generally accepted that there is an urgent need for large-scale financing to allow developing countries to mitigate and adapt to climate change. However, there is a yawning gap between the current level of climate change finance (approximately $8 billion per year) and even the conservative estimates by the World Bank for the amount required by developing countries ($90 billion-$210 billion; see footnote 1 at the end of this article).
Closing that gap was high on the agenda at a Climate Change Financing roundtable discussion hosted by Standard & Poor's Ratings Services and Parhelion Underwriting Ltd., a U.K.-based specialist insurance vehicle, in London on June 17, 2010. The objectives of this event were to assess investor appetite for climate change financing, identify innovative financial structures that could be applied to fund climate change projects, and examine the risks and barriers that might prevent their implementation. The event was attended by around 30 participants from the public and private sector, including representatives from multilateral agencies, development banks, investment banks, the insurance industry, policy think tanks, and institutional investors. For the purpose of this report, we define climate change finance as the provision of financial resources and investment, both public and private, in projects and actions partially or wholly intended to support action on mitigating greenhouse gas (GHG) emissions and adapting to climate change.