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Why the Climate Moonshot framework

  • to create the political will for transformational climate change mitigation

  • to align climate action with the national interest and short-term focused political agendas 

  • to create an international carbon price signal without carbon taxes or emission trading

  • to make effective use of governments' broad range of policy tools for mitigation 

How the global framework works

  • An emission baseline is established for each country. Not binding limits or commitments, only baselines


  • A price for carbon saving is established. An example could be $50/t CO2e


  • Countries emitting less carbon than their baseline in any year receive a cash payment for every ton saved

  • An international fund is created to make these payments, which borrows from private investors for the long-term


  • This international fund is backed by participating countries and repays its liabilities through their future financial contributions. The allocation of future liabilities among countries is based on a pre-agreed percentage or formula


Aligning climate action with the interest of decision-makers

Decoupling costs from taking action transforms countries’ incentives from free riding to maximising gains

Aligning climate action with the time horizon of decision-makers

The financial burden is pushed into the future, increasing the prospects for action now

Raising capital from private investors to finance the transition

Capital raised by the fund is distributed to countries and helps   finance   the decarbonisation of their economy

Much stronger political commitment and government action

Governments will be much more likely to act thanks to the short-term financial incentive

Full domestic political and policy flexibility to achieve emission cuts

This is politically attractive and fosters policy innovation

Flexibility of roll-out schedule with countries joining in stages

No need for a simultaneous agreement among all countries, which reduces the risk of delays

No need for an international enforcement mechanism

Countries reducing emissions receive payments, others do not

HFC Facility

The pilot scheme focuses on Hydrofluorocarbon (HFC) emissions

Can demonstrate the viability and benefits of the framework through faster and more straightforward implementation

HFC emissions represent an ideal area for a pilot scheme

Thanks to strong political commitment to reduce HFC emission; to caps under the Kigali Amendment, which could serve as benchmarks for the incentive payments; and to HFC reductions being a very cost-efficient way of reducing greenhouse gas emissions

The pilot scheme could deliver very significant climate benefits

Accelerating HFC reductions beyond the achievements of the Kigali Amendment could cut emissions by the gigatons or tens of gigatons of CO2e by 2050

Limited scope and cost-efficiency curbs financing requirements

Lower financing requirement facilitates implementation and enables a financing solution relying on unilateral donations and investments

This proposal immediately caught my eye, as a big ambitious idea, potentially with issues to match. But if successfully implemented it could possibly  bring market based, long term solutions to some of the challenging requirements for investment finance faced by developing countries needing to adapt to climate change.

Arpad Cseh is an experienced financial professional who understands markets and thinks rigorously.

Christopher Knowles

Head of Climate Change & Environment Division

European Investment Bank

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