The Covid-19 pandemic has brought the world to a tipping point or a turning point in the fight against climate change. Decisions taken by leaders today to revive economies will either entrench our dependence on fossil fuels or put us on a path to achieve the Paris Agreement and the Sustainable Development Goals (SDGs). For the COVID-19 pandemic to prove a turning point, climate action and COVID-19 economic stimulus measures must be mutually supportive; and developing countries must be able to access long-term affordable finance to develop and implement green recovery measures.
This working paper aims to support policy makers, the financial industry and international financial institutions in these efforts by ensuring that financial decision-making takes climate change into account. Specifically, the working paper highlights the risks posed by climate change to the finance system as well the risks and opportunities related to investment in low emission, climate resilient infrastructure in developing countries. It assesses the impact of COVID-19 pandemic on access to finance in middle and low income countries for low emission, climate resilient investments; and it identifies a combination of policy, financial and institutional initiatives to scale up climate finance to enable developing countries to realize their climate ambition in the era of COVID-19.