Investing in Ambition

Nationally Determined Contributions (NDCs) are a centrepiece of the new global climate regime which was agreed at COP21 in Paris and form the foundation for the pathway towards a low-carbon and climate resilient development.

By March 2016, 188 countries have submitted their INDCs, many of them including an unconditional as well as a conditional component. While those submitted INDCs are a significant step towards avoiding dangerous climate change, they are insufficient to reach the objective of limiting global warming to well below 2°C or even 1.5°C as set out in the PA under Article 2.1(a). This implies two main challenges for the international community: (i) to assure that all INDCs will become NDCs and that not only unconditional but also all conditional components will be implemented in order to ensure that the emissions gap will not grow wider, and (ii) that additional ambition needs to be triggered and implemented so that this gap will be closed. Ensuring financing is available for the implementation of NDCs plays a crucial role for addressing both challenges.

This paper analyses specifically the financial aspects included in the INDCs and aims to contribute towards a definition of comprehensive financing strategies for implementing NDCs. It provides an analytical overview of the financial aspects that have been included in the INDCs submitted so far and provides a discussion of options for financing NDC implementation.