A new study concerning the financial aspects of dealing with climate change states that, despite human society's having spent $364 billion (€278.458 billion) in 2010-2011 on tackling this issue, further investments are needed.
The Climate Policy Initiative maintains that, all things considered, limiting the global temperature rise to just 2 degrees Celsius, as is the plan, can only be achieved if each year from now until 2050 witnesses $1 trillion (€0.764 trillion) going into green-oriented projects.
Interestingly enough, much of said $364 billion was provided by the private sector, meaning that it was large corporations and green energy promoters that constituted the primary source of global climate finance.
Thus, such investments made in the private sector amounted to $217 - $243 billion (€166 - €185.9 billion).
In Germany's case, it seems that as much as 95% of the country's total climate finance was provided by the private sector.
By contrast, national development and commercial banks spent $110-$120 billion (€84.14 - €91.8 billion) on trying to put a leash on global warming, and the global public sector chipped in about $16 - $23 billion (€12.24 - €17.6 billion).
“Most public sector investment acted as a catalyst for private investment through incentive mechanisms and subsidies that helped to lower investment costs,” the Climate Policy Initiative (CPI) explains.
Commenting on these findings, the Director of CPI Europe, Barbara Buchner, argued that, “The fact that the public policies and incentives are starting to unlock private investment is good news for policymakers dealing with limited budgets.”
“However, the level of available investment still falls far short of the total amount needed to limit global warming to two degrees Celsius. We must focus on the policies that are working and act quickly to scale those up around the world,” she went on to add.
According to this report, a large portion of this climate finance was directed towards emerging economies, and a third of the total global climate mitigation investments went to China, Brazil and India.
Still, as this group points out, “According to the International Energy Agency, approximately USD 1 trillion each year is needed in incremental investment in the energy sector alone to promote low emissions growth. Much more will be needed to achieve climate resilient development globally.”