As COP21 draws nearer, there is more and more hope that the 2015 UN Climate Summit will be a turning point in tackling climate change globally. And the latest report from the Climate Policy Initiative indicates that climate finance has significantly increased over the last year, adding further support for a successful global deal in Paris.

In order to make this happen, a global transformation of our financial and energy systems is needed. This will enable a low-carbon and climate-resilient global economy to take place, and will support the implementation of the climate action plans (INDCs) already proposed by more than 150 countries.

To support this, the Climate Policy Initiative’s new report, The Global Landscape of Climate Finance 2015, presents "The most comprehensive information available about which sources and financial instruments are driving investments, and how much climate finance is flowing globally.”

According to the latest figures, global climate finance flows reached an all-time high of at least USD$391 billion in 2014 as a result of a steady increase in public finance and record private investment in renewable energy technologies. This is an increase of 18 percent from last year’s USD$331 billion. The majority of this climate finance went to climate mitigation projects, representing more than 90 percent of total global.

Public climate finance increased by 8 percent, with contributions by governments and intermediaries reaching at least USD$148 billion, but it is private finance that was the largest contributor to climate mitigation.

Private investment grew by 26 percent in 2014 after two years of decline. With USD$243 billion, private investment remained the largest source (62 percent) of global climate finance.

This big increase was mainly driven by the huge renewable energy demands in China and the decrease in costs of electricity from utility scale solar, which has fallen by 50 percent since 2009.

These latest figures are very encouraging in helping us transition to a global low-carbon economy. Nevertheless, more than USD$16.5 trillion is needed between 2015-2030, to successfully reach a less than 2c degree world. This equates to a little more than $1 trillion/year.

The report offers four key advices on moving forward to scale climate finance.

1. Enhance tracking efforts of climate finance globally
2. Encourage domestic investment policy
3. Innovate to develop or refine financial instruments that meet the needs of investors
4. Enhance the integration of climate change considerations into the financial system

Last year’s increase in climate finance is very encouraging, but we need to do much more to be able to reach our 2 degree objective. And hopefully COP21, with the help of this report, will offer a platform for financiers to make this happen and scale climate finance.

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