Understanding the Climate Finance Gap
Understanding the Climate Finance Gap
The private sector has a tremendous opportunity to capitalize on the growing momentum in global climate and sustainability (“climate”) finance.
Annual global climate finance flows doubled in the two years from 2020 to 2022, reaching $1.4trn or 1% of global GDP, but will need to increase sixfold to average $8.6trn through 2030, and $10.7trn through 2050, to reach net zero. The public sector alone cannot meet the $7.2trn gap in annual finance needs up to 2030, but it is vital for catalyzing private finance.
Sixty percent of critical climate technologies are ready for commercial scaling. Yet there remains a need to push technologies across all climate sectors past the “tipping point” where costs reduce significantly.
In this paper we discuss how successfully scaling these technologies will not only mitigate emissions but also unlock new value pools across sectors estimated to be as large as $12trn annually, providing opportunities for private market investors.