Climate Finance

Climate change is an expensive collective problem that will be felt unequally around the world and within communities. Sustainable and equitable financing is needed to address disparities and reduce the economic costs of loss and damage from climate change.

Carbon dioxide removal technologies are gaining prominence in academia, industry and policy, yet the need for substantial funding raises serious challenges. This comment discusses these issues and offers suggestions for future funding efforts in this area.

Financing of urban greening has traditionally prioritized economic growth. Here the authors argue for action to ensure more socially just green financing.

The ocean supports many livelihoods, but this is currently not sustainable with pressures on the climate and ecosystems. Here, in this perspective, the authors outline the barriers and solutions for financing a sustainable ocean economy.

The authors estimate the damages associated with global temperature variability. They find that variability in temperature leads to substantial uncertainty about damages, which imposes costs equivalent to a large fraction of annual consumption today.

Sea level rise amplifies coastal storm impacts, but the role of anthropogenic climate change is poorly resolved. Here the authors reassess Hurricane Sandy, using a dynamic flood model to show that anthropogenic sea level rise added a central estimate of $8 billion in damages.

Heatwaves are becoming increasingly frequent and more intense, causing severe economic impacts through reduced labour productivity. Here, the authors show that economic damages in Europe exceed 1% of the GDP in vulnerable areas, which might increase by a factor of almost five in the medium term without climate action.

European Union’s vulnerability to climate change stretches far beyond its borders. Here the authors find that more than 44% of the EU agricultural imports will become highly vulnerable to drought in future because of climate change.

Deforestation and drainage have made Indonesian peatlands susceptible to burning. Here the authors find that Indonesia’s 2015 fires resulted in economic losses totaling US$28 billion, while the area burned and emissions released could have been significantly reduced had restoration been completed.

The impacts of climate change on agricultural productivity remain debated. Here, the authors present new evidence for the magnitude and causes of U.S. crop insurance losses, using a database of production risk from 1989–2014 across 1733 counties for corn and 1632 counties for soybeans, and find that crop production risk will increase in response to warmer temperatures.

Economic estimates of flood damages rely on depth–damage functions that are inadequately verified. Here, the authors assessed flood vulnerability in the US and found that current depth–damage functions consist of disparate relationships that match poorly with observations which better follow a bimodal beta distribution.

Melting of the Antarctic Ice Sheet is projected to impose severe costs on Small Island Developing States, and increase the worldwide social cost of carbon emissions, but costs could be reduced dramatically by efficient, proactive coastal planning.

Exploring the heterogeneity in impacts and outcomes of using solar geoengineering to counteract global warming is important. Here the authors found that solar geoengineering that reduces temperature below present-day would grow GDP by accelerating economic development in tropics, but projections for global GDP-per-capita by the end of the century are highly dispersed and model dependent.

Governments may struggle to impose costly polices on vital industries, resulting in a greater need for negative emissions. Here, the authors model a direct air capture crash deployment program, finding it can remove 2.3 GtCO₂ yr^–1 in 2050, 13–20 GtCO₂ yr^–1 in 2075, and 570–840 GtCO₂ cumulative over 2025–2100.

There lacks a comprehensive analysis on the large-scale deployment of solar photovoltaic projects and its impact on poverty alleviation. Here the authors show that solar photovoltaic poverty alleviation pilot policy increases per-capita disposable income in a county by approximately 7%-8%.

Many trajectories for reaching climate change mitigation targets exaggerate the long-term need for CO₂ removal (CDR) because they assume an exponentially increasing carbon price. Here the authors analyse alternative carbon price pathways that halt warming while limiting CDR, and may be easier to implement.

Recent publications have raised concerns regarding the actual feasibility Negative Emission Technologies (NETs). Here the authors commented on the financial viability of large-scale late century NETs and suggested that expenditure peak will occur in the end of the century, which would require massive global subsidy program.

This study indicates that approximately 5.8 TW of wind and solar photovoltaic capacity would be required to achieve carbon neutrality in China’s power system by 2050. The electricity supply costs would increase by 19.9% or 9.6 CNY¢/kWh.

Charging costs are important for the diffusion of electric vehicles as required to decarbonize transport. Here, the authors show large variance of electrical vehicle charging costs across 30 European countries and charging options, suggesting different policy options to reduce charging costs.

Access to low cost finance is vital for developing economies’ transition to green energy. Here the authors show how modelled decarbonization pathways for developing economies are disproportionately impacted by different weighted average cost of capital (WACC) assumptions.

Benefit-cost analyses of climate policies have generated conflicting assessments; as social welfare is affected by regional heterogeneity. Here the authors show that economically optimal pathways are consistent with climate stabilization but are characterized by persistent economic inequalities due to climate damages.

Ambitious climate policies can negatively impact the global poor by affecting income, food and energy prices. Here, the authors quantify this effect, and show that it can be compensated by national redistribution of the carbon pricing revenues in combination with international climate finance.

The intergenerational distribution of costs and benefits of climate change mitigation is not well understood. Here the authors analyze lifetime costs and benefits of climate change mitigation by age cohorts across countries under the Paris Agreement.

In the summer, low-income households in the Arizona, US wait 4 - 7 °F (2.6–4.2 °C) longer than high-income households to turn on their AC units to save money on energy bills. This energy limiting behavior indicates a hidden form of energy poverty.

Floods are most devastating for those who can least afford to be hit. Globally, 1.8 billion people face high flood risks; 89% of them live in developing countries; 170 million of them live in extreme poverty making them most vulnerable.

In exploring the energy required to provide decent living for all, the authors find the costs of inequality to be far greater than that of population growth. Nonetheless, population growth remains important for other reasons.

New study shows that up to 50% of properties flooded after hurricane Harvey flooded because of climate change, with low-income and Latina/x/o neighborhoods experiencing higher climate change-attributed impacts.