Recent estimates suggest that the developing world will need US$1 trillion of external climate finance annually by 2025, and $2.4 trillion per year by 2030, to meet the goals enshrined in the Paris climate agreement. But these targets will not be met unless international financial institutions and governments create stronger incentives, paying special attention to three key areas.
First, the world needs a more robust and consistent international process of price discovery for new offerings such as carbon offsets, green hydrogen, direct carbon capture, and battery storage. Because price-discovery mechanisms currently vary from country to country, the international community must come together to establish an overarching framework, which, by enabling offtake (pre-purchase) agreements, would help clean-energy manufacturers attract more investment, escaping the "chicken-or-egg" scenario in which many currently find themselves.
