Business Case Studies & Business Publications

Climate Finance in 2020: Background Note

Artuso, Anthony, L...

Technical Note

Climate Finance in 2020: Background Note

Artuso, Anthony; Leamon, Ann

F-1986 | Published July 26, 2021 | 14 pages Technical Note

Collection: Darden School of Business

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This technical note provides a brief overview of the state of climate finance at the start of the 2020s. Catastrophes such as the Texas power grid failure and widespread wildfires in other western states have highlighted the increasing financial costs of climate change. The material includes market failures that have constrained the financial sector’s response to the challenge of climate change, along with different methods that have been used to target funding toward climate-related opportunities. It offers consideration of the roles of public, private, and blended finance products to provide the trillions of dollars necessary to meet the needs of the Paris Accord. The note can be used both as background material or as a discussion topic itself, in which students might consider how best to address these market failures, how public finance might mobilize private capital, the benefits and drawbacks of vehicles used to date, and the innovative vehicles they might design. The depth of financial detail discussed in the class can be customized to reflect student knowledge.

- Explore the complexity of funding climate change mitigation. - Utilize the concept of market failures to evaluate climate policy and climate finance. - Understand the roles of public- and private-sector actors in responding to a global problem. - Explore options to structure finance markets and instruments to address major social challenges.