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Background Report on Long-Term Climate Finance

A major investment shift toward low-carbon and climate-resilient infrastructure and away from high emitting activities is required to support the economic transition necessary to reduce emissions in line with the internationally agreed goal to limit global temperature rise to 2° Celsius. The scale of finance required means that solutions must include multiple sources of climate finance via a sometimes complex combination of public and private sources, actors and instruments.

This Background Report on Long-Term Climate Finance was prepared for the German G7 Presidency 2015 to serve two objectives; 1) to describe recent trends that could impact global climate finance flows; and 2) to provide an updated overview of sources, actors and instruments relevant for achieving the commitment to mobilise USD 100 billion goal per annum for developing countries’ climate actions by 2020. The trends and updates presented in this report aim to facilitate serious discussion between political leaders on the key questions relating to long-term climate finance. Section 2 of the report describes recent global trends that may impact flows of climate finance. Section 3 presents the current state-of-play for the sources, actors and instruments of climate finance that are likely to play a role in meeting the USD 100 billion commitment.