Transition Bond Frameworks: Goals, Issues, and Guiding Principles

While developed country signatories of the Paris Agreement plan to mobilize $100 billion per year (UNFCCC, 2015), the International Energy Agency (2014) estimates that $53 trillion in energy-related investments alone will be required by 2035 to achieve the 2C temperature target. Additionally, the annual abatement costs of achieving the current Nationally Determined Contributions (NDC) reduction targets submitted by member countries could require $97 to $191 billion by 2030 (Hof et al., 2017). A variety of finance mechanisms that leverage both public and private resources are thus crucial to channel global capital into the Paris Agreement and NDC initiatives.