Climate finance and financial gradients: perspectives and methods

Article type: Research Article

Authors: Bose, Arnab

Note: [] Arnab Bose, Research Associate, TERI, Email arnab.bose@teri.res.in

Abstract: The present debate in Climate Finance is whether there is a misplaced focus on public sources of funds from developed countries instead of investment grade financial resources. In other words, financing climate action via public funds is proving to be a constraint. Similar constraints also exist in programmes for Energy Access using Renewable Energy, and other resources in the sustainable development domain. To address these constraints, financial and business strategies are often developed. While analysing such strategies, the concept of “financial gradients” emerged. This paper espouses the idea of financial gradients, which is a potential methodology for a financial mechanism for sustainable development action. Financial gradients can be an answer to addressing investment-grade climate action issues. It can be thought of in three different ways: first, as an approach to analyse financial flows in programmes or projects in the sustainable development space, while it can come up with key financial indicators, which can point towards the health of the programme or project, and also act as a tool by which individually volatile sources of finance can be combined together to generate a single long-term and stable inflow of finance to fund a programme in sustainable development. Another way to describe financial gradients is as a financial mechanism to help in creating long-term strategies with the help of both business and financial models to sustain the programme or project. This paper will concentrate on financial gradients as a potential approach in a sustainable development programme.

DOI: 10.3233/IJR-120103

Journal: International Journal of Regulation and Governance, vol. 11, no. 2, pp. 57-76, 2011