Climate Finance in the European Union: Domestic and International Challenges

This contribution focuses on the most important policies, pathways and challenges involved in the EU’s domestic and international climate finance efforts. Domestically, a key challenge is to find the ‘right’ incentives to mobilize public and private finance, ranging from market mechanisms (the EU ETS), to investment choices made on the basis of voluntary agreements, efforts to change consumption patterns (e.g. eco-labelling), subsidies, taxation, command-and-control, and budget mainstreaming (non-ETS). Internationally, one of the obstacles is the absence of a commonly agreed definition of ‘new and additional resources’, and related accounting and transparency issues. In the EU, much is expected from a mix of well-crafted policies and increased public finance, which would be able to catalyze private investment as the central pathway of the (domestic and global) low-carbon transition.status: publishe