Climate Finance for Just Transitions: Building Low-Carbon Development Pathways in an Age of US-China Rivalry

Abstract

This paper investigates challenges throughout the international climate finance landscape and recommends pathways for how investments into low- and middle-income countries (LMICs) can more effectively drive low-carbon development. The paper focuses on three issue areas: (1) aligning national climate strategies and international finance, (2) finding avenues for positive climate finance outcomes in an era of growing rivalry between Chinese and Group of Seven—particularly US—public financiers, and (3) reforming major climate finance practices and institutions to more effectively cater to the needs of LMIC stakeholders. This paper is part of a series of work under the New Frontiers in Climate Finance project, led by the James E. Rogers Energy Access Project, which is scoping the challenges and opportunities inherent to climate finance in LMICs, and seeking to help increase the scale and transformational impact of climate finance to these economies. The project aims to mobilize key stakeholder organizations around a common vision for aligning the tools of development finance with the needs and strategies of LMICs, and to build low-carbon development pathways that support poverty alleviation while reducing the next global wave of greenhouse gas emissions.