Leveraging Public Finance to De-Risk Private Investments: Legal Mechanisms to Close the Climate Finance Gap

Jihyeon Sung, Chadwick International School (Incheon, South Korea)
Volume8 nos.1 January 2025 ISSN 2755-3272

Keywords

Climate finance; Paris Agreement; Bilateral investment treaty; Minilateralism; Energy Charter Treaty; International investment law.

Abstract

This study examines the role of legal mechanisms in scaling climate finance by leveraging public funding to incentivize private investment, which is essential to bridge the climate finance gap in line with Nationally Determined Contributions (NDCs) under the Paris Agreement. The paper analyzes existing legal frameworks and proposes methods to de-risk private investments through public finance, with a focus on enhanced roles of multilateral and public financial institutions, reforms in international investment law, and minilateral initiatives, such as Climate Clubs.