With an estimated global climate investment gap of USD 6.1 trillion per year by 2030, annual climate investments must increase fivefold to keep global temperature rises within 1.5°C by the end of this century and avoid the worst impacts of climate change and related economic losses. ​  

While extensive literature exists on climate investment barriers and risks in underserved markets, there is a lack of research on the actors and actions required to close the identified finance gaps in different sectors and geographies. This limits the potential for coordinated action to increase the scale of climate investments quickly and ensure an effective use of public and private, domestic and international resources.  

Climate Policy Initiative (CPI) has developed this methodology framework to inform the creation of Climate Finance Roadmaps, with guidance on how to conduct analysis at every stage of the process. Climate Finance Roadmaps for specific countries and sectors based on this methodology can inform on which financial actors and what types of finance can best close the investment gap in different sectors and geographies. They can also help to identify and prioritize interventions to mobilize climate finance at scale. 

This report lays out CPI’s proposed approach to analyses for building Climate Finance Roadmaps, including methodological steps, assumptions made, data points required, and expected outputs of this work, among others.  

Climate Finance Roadmaps can help to identify: 

• Most suitable investors in different markets, based on investors’ preferences and characteristics, the risk profiles of each sector and geography, as well as availability of private capital; 
• Financial instruments required to close the investment gaps most effectively, based on technology and financial market maturity; 
• Policy and regulatory measures needed to overcome investment barriers and attract climate investments at the scale required; and 
• Robust methodology for closing climate finance gaps that can be applied by various actors in local and regional contexts. 

How to use this methodology framework 

This methodology framework is not meant to be prescriptive but rather to be used as a tool to help others develop analyses that provides guidance on key considerations, variables, and steps when building a Climate Finance Roadmap.  

As a next step, CPI plans to test this methodology framework to develop Climate Finance Roadmaps for specific pilot geographies and sectors, using this as an opportunity to also validate and improve the elements of this approach. We invite other organizations, capital allocators, and policymakers to adopt this framework for their own testing and to get in touch if they wish to jointly develop Climate Finance Roadmap analyses for specific sectors or geographies. 

This document is published as a living methodology for experts and other stakeholders to comment on. We welcome feedback, suggestions for improvement, and ideas to refine and enhance our methodological approach and ensure that the resulting Roadmaps are relevant and impactful. We welcome any inputs and contributions shared with us at costanza.strinati@cpiglobal.org. 

Overview of proposed approach 

The figure below outlines the methodological steps in CPI’s proposed approach illustrating how they relate to each other and contribute to each Climate Finance Roadmap. Not all steps must be sequential—some can be conducted in parallel, and the order of implementation may vary depending on the scope and depth of the analysis.