Paper release: Financing the transition from brown to green

On the occasion of President Macron’s One Planet Summit on 12 December, Climate Transparency and its partner the Overseas Development Institute release the paper “Financing the transition from brown to green: How to track country performance towards low carbon, climate-resilient economies”. It maps key actors in financing the transition and develops a new categorization of tools available for public institutions to shift from brown to green finance. It also presents nine indicators to assess country progress which can inform the Facilitative Dialogue/Talanoa Dialogue leading up to the 2023 Global Stocktake.

Key messages

  • Green finance is increasing but a faster shift away from brown is needed. While there has been progress worldwide in mobilising green finance, current brown (or high carbon, climate risk inducing) finance substantially outweighs the green. The focus of transitioning to a low-carbon, climate-resilient economy must be on shifting away from brown finance and not only on mobilising further green finance.
  • Critical actors for the transition are those central to climate but for whom climate is not central. In order to mobilise green finance and to shift from brown to green finance, a range of public and private actors have to take action. The interplay between governments, development finance institutions, (central) banks, rating agencies, stock exchanges and (institutional) investors – thus actors for whom climate action may not be a central priority – is determining.
  • Public actors can deploy policy instruments, fiscal policy levers and public finance to transition. Governments, central banks and financial authorities have at their disposal tools from three categories: 1) financial policies and regulations, 2) fiscal policy levers and 3) public finance. A transition requires the application of a combination of tools in each category. Together, these sets of tools support increased private green finance.
  • Nine indicators can be applied to G20 countries to provide a broad picture of progress in financing the transition. Comparing country action drives learning and national debates. In 2018, Climate Transparency will continue to work on these indicators, aiming to apply them, where possible, to G20 countries in their annual Brown to Green Report assessment report. Ongoing review and evolution of these indicators – such as through benchmarks – will reflect current thinking and data developments in a rapidly moving field.

G20 Brown to Green Report 2017

G20 Report 2017:
Country Profiles: Argentina | Australia | Brazil | Canada | China | EU | France | Germany | India | Indonesia | Italy | Japan | Korea, Rep. | Mexico | Russia | Saudi Arabia | South Africa | Turkey | UK | USA