Put simply, how much climate finance is out there, circling the planet right now?
The short answer is: not enough. And the challenge is how to make it greater.
It is no accident that the 2015 Paris Agreement puts climate finance on an equal footing with climate mitigation and adaptation.
Article 2 calls for "making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development".
That means diverting capital away from activities that produce greenhouse gas emissions and into activities that are part of the solution.
Yesterday's announcement that the Government will suspend new oil and gas exploration permits expedites this shift.
But the next question is where that diverted investment will find a new home.
Attempts to measure global climate finance vary greatly.
Climate Policy Initiative has a conservative estimate of US$410b in 2016.
The UNFCCC Standing Committee on Finance put global climate finance flows at US$714b annually.
But there remains a global financing gap. In the energy sector alone, the International Energy Agency estimates that we need to invest US$900b annually into energy efficiency and low-carbon technologies between 2015 and 2030 to meet the national pledges made in the Paris Agreement.
For core infrastructure – power, transport, water and waste, and telecommunications – the demand for finance is even greater.
The Global Commission on the Economy and Climate estimated that, over this same period, we need to lift annual investment from about US$3.4 trillion in 2015 to US$5–6 trillion per annum.
The scale of these shortfalls are daunting. It would be easy to treat it as too demanding.
But think of it this way: this is a productive investment into infrastructure that will support a more sustainable future for ourselves and our children.
Along the way, this transition will create climate-aligned jobs and growth, as well as numerous co-benefits like better air quality or reduced nitrates.
And if we really get our act together, we will lessen the costs of climate change itself.
Recent modelling by the OECD calculates that a collective "decisive transition" could boost long-run economic output among G20 countries by 2.8 per cent on average.
If we include the avoided costs of climate-related damage, then the net effect on combined GDP is 4.7 per cent higher than business-as-usual by 2050.
Investing into this low-emissions transition isn't frivolous, but a real commitment to long-term prosperity, which treats future costs as seriously as present-day expenditure.
The good news is that this transition is already under way, not only globally, but also in New Zealand. It isn't large enough, it isn't fast enough, but it is happening.
In our newly released report prepared for the Ministry for the Environment, Climate Finance Landscape for Aotearoa New Zealand: A Preliminary Survey, we apply the climate finance lens domestically.
We find a range of activities and assets that meet climate finance criteria, whether private investment by companies into offsetting or energy efficiency, or public grants to encourage energy efficiency, electric vehicles, or sustainable land practices.
This space is also rapidly evolving. Green bonds are emerging for financing or refinancing new infrastructure, whether Contact Energy's $1.8b Green Borrowing Programme or Auckland Council's ambition to issue green bonds later this year.
Meanwhile, the new Government has pledged to establish the $100m Green Investment Fund to further mobilise climate-aligned finance.
Still, there is room to do more – and to be more strategic and sophisticated in how we do it.
If we could sum up in one phrase where the opportunity for innovative solutions lies, it's this: blended finance for integrated impacts.
"Blended" in the sense that public and private finance can come together to achieve scale, and to overcome the barriers that hinder sustainable investment.
"Integrated" in the sense that investments should measurably have a positive, not a negative, social and environmental impact, as well as an economic return.
This formula cannot solve all our climate change challenges.
Climate finance isn't a substitute for policy and public spending: these things all need to work together.
But it is an enabler: it can unlock resources to achieve outcomes that otherwise wouldn't be achieved.
• Dr David Hall is senior researcher at The Policy Observatory, AUT. Sam Lindsay is an impact investing specialist with experience in Singapore, Myanmar and Bhutan. Their report, Climate Finance Landscape for Aotearoa New Zealand: A Preliminary Survey, can be found here.
