Bridging the Gap: How to Finance the Net-Zero Transition

The financing of a lower-carbon economy is one of the defining challenges of our era. This paper offers a timely exploration of the transition finance gap, a critical fault line in global efforts to meet climate goals. The gap is not simply one of capital and business case, but also of public policy and frameworks.

The report explores the drivers of the climate finance gap, including fragmentation in both climate policy-making and the global financial services sector. It analyses how the gap affects developing and developed countries differently and investigates the potential of “common but differentiated responsibilities and respective capabilities” in ameliorating the developing-developed country divide.

The authors argue that private capital is central to bridging the climate finance gap. Public funding, while vital, cannot meet the scale of the challenge alone. Unlocking private sector engagement will require de-risking mechanisms and a regulatory environment that is clear, consistent and credible.