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078 FINANCE AND INVESTMENTPROMISING SHIFTS IN THE FINANCIAL LANDSCAPEIn December last year, 197 countries signed the Paris agreement1 and pledged to limit Global Warming to less than two degrees Celsius (2°C) above pre-industrial levels, the threshold for which scientists anticipate irreversible damage and extreme weather effects. While this represents a historic turning point and the culmination of 23 years of climate negotiations, the success of the Agreement will be defined in the coming years by whether it can turn the political will demonstrated into the transformative mechanism that is needed to solve the intractable issue of our age.While the scale of this ambition is monumental, the actual commitments on the table fall short of what is required to prevent drastic and irreparable climatic damage. In Paris, a large number of countries submitted their individual plans on how they intend to address climate change in both the short and long-term, their Intended Nationally Determined Contributions (INDCs). Included in these plans are their proposed actions to reduce greenhouse gases (GHGs). To date, the cumulative total of the 162 submitted Indented Nationally Determined contributions (INDCs), while covering 98.8 per cent of global emissions from 187 countries is still not sufficient to limit global warming to 2°C. However, there is still much cause for hope. The INDCs, in their first iteration may not realise the full ambition of the Paris Agreement, but the agreement includes a process for strengthening the henceforth termed ‘Nationally Determined Contributions’ (NDCs), with signatories of the agreement expected to produce new NDCs by 2020, and every five years thereafter. In addition, the Copenhagen pledge of mobilising US$100 billion per year for climate action in developing countries by 2020 is now extended through to 2025. Parties also agreed that by 2025 there will be a new quantified climate finance goal, starting with at least US$100 billion per year. Finance remains integral to enabling effective climate action as demanded by the ambition of the Paris Agreement. Meeting emission and adaptation targets will essentially drive a restructuring of the global economy; upgrading inefficient and climate vulnerable infrastructure, scaling up renewable energy generation, improving energy efficiency and shifting to new forms of agricultural practice and land-use management. The overall scale of this challenge is extraordinary. The International Energy Agency estimates that between 2015 and 2030 investment in the order of US$16 trillion will be required to realign the global energy system with a 2°C limit. When the effects of a growing global population and middle class are considered, between 2015 and 2030, the demand for new, sustainable infrastructure could exceed US$90 trillion2. Ensuring this infrastructure does not lock-in a higher emissions trajectory but instead supports the transition to a low-carbon economy is estimated to have a net incremental cost of around US$4trillion3. In the buildings sector alone meeting the Paris commitments will require about US$300 billion annually by 2020 for financing energy efficiency retrofits. According to the 2015 Climate Policy Initiative report, ‘Global Landscapes of Climate Finance 2015’, in 2014 a little over that amount, US$391 billion, was invested in all low-carbon and climate resilient actions, just a fraction of the required overall amount.ERIC USHER, HEAD, THE UNITED NATIONS ENVIRONMENT PROGRAMME FINANCE INITIATIVE (UNEP FI)