Initiatives & Policy Dialogues >>

International Climate Finance

Initiative overview

International climate finance plays a pivotal role in enabling developing countries to pursue low-carbon (mitigation) and climate-resilient (adaptation) pathways. It helps bridge the financing gap for projects that would otherwise struggle to attract investment, particularly in regions with limited access to capital. Among others, grants-based climate finance and highly concessional loans can support local capacity-building, the piloting of innovative solutions, and policy alignment with the Paris Agreement. It also acts as a catalyst for leveraging private sector participation, thereby multiplying the impact of public funds. Ultimately, international climate finance is crucial for addressing the climate crisis equitably and ensuring that no countries, regions, indigenous peoples and local communities are left behind.

International Climate Finance in the UNFCCC

Climate finance is among the key negotiation streams in international climate conferences. Reaching the USD 100 billion climate finance target and agreeing on the New Collective Quantified Goal on Climate Finance were major milestones for international climate finance. However, it also demonstrated significant shortcomings, both quantity and quality – given the scale of climate challenges we already face. International climate finance needs to be more ambitious, inclusive, and needs-based, truly reflecting the urgency of the climate crisis and the financial flows necessary to address it effectively.

The climate finance team at Perspectives follows climate finance negotiations under the UNFCCC, conducting research and providing consulting services.

Key Publications

11/2025: Updated Pocket Guide to Finance under the UNFCCC, guide with ecbi

08/2024: New Collective Quantified Goal on Climate Finance, briefing note with ecbi

11/2023: International Climate Finance from a Global Perspective- Working Paper

10/2022: Handbook of International Climate Finance, available via Edward Elgar Publishing

Outreach activities 

11/2024: Official UNFCCC Side Event on Nordic Climate Finance at COP29

Research reports

innovative climate finance instruments

debt for climate swaps

Debt-for-Climate (DFC) swaps are an innovative climate finance instrument designed to address both the sovereign debt and climate crises. By reducing debt and creating fiscal space for climate investments, DFC swaps can mobilise essential climate finance for developing countries. We analyse the potential of DFC swaps and explore ways to improve DFC swaps, increasing their scale, efficiency, and alignment with national climate goals.

Key publications

01/2026: Debt-for-Carbon: Using Carbon Credits for Debt Relief, discussion paper co-authored with Environmental Defense Fund

04/2024: Debt-for-Climate Swaps: a controversial tool to unlock climate change mitigation and adaptation in countries with high debt burden

12/2023: Debt-for-Climate swaps as a tool to tackle climate and debt crises: opportunities and challenges

Outreach activities

06/2024: Perspectives’ webinar on  Towards a climate finance goal in times of debt crises and limited fiscal space

Media Appearances

01/2026: Carbon credits could back debt-for-climate swaps, interview with Carbon Pulse

loss and damage

Climate change exacerbates extreme weather events like heatwaves and flash floods, leading to loss and damage (L&D) for vulnerable communities worldwide. Given that the global average temperature has already increased by more than 1.1°C from the pre-industrial period and the speed of increase is unbroken, it is almost certain that the severity and scope of climate change impacts will escalate in the coming years. The concept of L&D is particularly important to low-income and Small Island Developing States (SIDS) that are disproportionately affected by climate change while having contributed only marginally to the problem. Moreover, these nations often lack the resources to adapt to the effects of climate change, making them more susceptible to severe L&D. Consequently, any approach to L&D must include both mitigation and adaptation (including comprehensive risk management strategies) to reduce future L&Ds effectively.

Key publications

11/2023: Towards closing a deal on finance for Loss and Damage (L&D)

11/2023: L&D Pilot Funding Arrangements – Tools to respond to non-economic loss and damage

10/2023: Loss and Damage Finance: An assessment of the most promising instruments

Consulting projects

2023: EU Climate Diplomacy Support: Perspectives drafted knowledge products, and implemented, in collaboration with ICF and DG CLIMA, technical online meetings and workshops directed at EU Delegations as well as Commission services and Member State missions

Outreach activities

04/2024: Presentation at a webinar of the Loss and Damage Youth Coalition

02/2024: Perspectives’ webinar on Digesting the COP28 outcomes on Loss and Damage – Perspectives Climate Research

02/2024: Presentation at the Adjust conference on “Justice in Finance for Climate Change Adaptation and Loss and Damage” in Berlin, Germany

12/2023: Side-event on Debt-for-Climate-Swaps with the Seychelles at COP28

12/2023: Side-event on Debt-for-Climate-Swaps at the Nordic Pavilion at COP28

10/2023: Guest lecture at the University of Edinburgh Business School

other climate finance projects

Key Publications

11/2024: Sida’s Climate Mitigation Finance: a Portfolio Evaluation, working paper for The Expert Group for Aid Studies (EBA)

10/2024: Swedish Climate-change Mitigation Finance, evaluation report for The Expert Group for Aid Studies (EBA)

05/2022: Definitions and accounting of climate finance: between divergence and constructive ambiguity, research article in the academic journal Climate Policy

07/2020: Do Multilateral Development Bank Trust Funds Allocate Climate Finance Efficiently?, research article in the academic journal Climate Policy, Special Issue ‘Adapting to Climate Change: The Interplay between International and Domestic Institutions in the Context of Climate Finance’

07/2020: Mobilising private climate finance for sustainable energy access and climate change mitigation in Sub-Saharan Africa, research article in the academic journal Climate Policy

06/2020: Climate Change-related Trust Funds at the Multilateral Development Banks, research report published by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

08/2018: Linking the Clean Development Mechanism with the Green Climate Fund: Insights from Practitioners and Decision Makers in Africa, research report for the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB)

05/2016: Investing in Ambition: Analysis of the financial aspects in (Intended) Nationally Determined Contributions, briefing paper for BMUB

Outreach activities 

10/2022: International climate finance: need for reforms to increase efficiency and effectiveness, public hearing in the German Bundestag’s Committee on Economic Cooperation and Development

Consultation projects 

2018-2024: Climate Finance Innovators (CFI): The project aims to develop replicable climate financing models in Ethiopia, Senegal and Uganda that are based on the Clean Development Mechanism elements and activities. The project thereby establishes innovative linkages between UNFCCC market mechanisms and international climate financing institutions such as the Green Climate Fund (GCF). Among others, through CFI Perspectives was one of the technical partners of the Government of Ethiopia for the development of  FP243: Climate-resilient community access to safe water powered by renewable energy in drought-vulnerable regions of Ethiopia, an innovative project approved by the GCF in October 2024.

Media Appearances