Financing the Climate Mitigation and Adaptation Measures in Developing Countries

The threat of climate change requires a rapid transition to a new, low-carbon style of economic development. How will the transition be financed? Most of the global potential for emission reduction is located in developing countries. Achieving this potential, plus adaptation to climate damages, will cost hundreds of billions of dollars per year. Existing climate funding amounts to less than $15 billion annually, mostly through CDM – far less than is needed. A new climate funding agreement could build on the lessons of the Montreal Protocol for reduction of ozone-depleting substances, a successful case of international environmental cooperation.