Call for Ideas: Tackling Climate and Sustainable Development Challenges

Proposed sustainable finance vehicles should offer returns for private investors, create jobs and other local economic benefits, sustain biodiversity, improve climate resilience and/or decrease emissions.

In 2024, the Lab will develop a record ten climate finance ideas from five regional programs and four thematic streams.

• Brazil
  • The country committed to zero deforestation by 2030, restoring millions of hectares of forests while increasing renewables in the energy mix, among other measures.
  • However, like in many emerging economies, funding to meet these targets remains challenging. For this reason, the Lab seeks transformative investment solutions that can drive funds for Brazil’s national climate priorities.
  • The U.K. Department for Energy Security & Net Zero funds the Lab’s Brazil program.
• India
  • There has been progress on multiple fronts aimed at achieving India’s net zero target by 2070.
  • This includes financing solutions like the Indian government’s 2023 sovereign green bond, subsidies such as the FAME scheme for green transportation, decarbonization measures like the National Green Hydrogen Mission, and Budget 2023’s US$4.3 billion outlay for priority capital investments in energy transition, net zero goals, and energy security.
  • Increasing investment from the private sector is essential to driving the country’s growth. A lack of access to credit, high risks, poor financing terms, and lack of innovative financing mechanisms may be limiting India’s investment potential in green sectors.
  • With support from Bloomberg Philanthropies, the Lab is seeking innovative solutions to finance India’s green growth, providing concrete solutions to the unique financing challenges to investment in green sectors in India.
• East and Southern Africa
  • The Lab’s East and Southern Africa program seeks innovative finance instruments to address the unique challenges of the Southern Africa Development Community (SADC) and East African Community (EAC) regions. These regions are among the most vulnerable to climate change due to their exposure to climate change stresses and low adaptive capacity.
  • National budgets cannot cover the entire cost of the necessary investments, so international public and private financing and capacity-building support are essential for these countries to meet their climate targets.
• Latin America and the Caribbean
  • Three key barriers to climate finance flow in the region are:
    • Mismatch between the type and scale of available and required financing options.
    • Lack of awareness and capacity to leverage climate finance among local financial institutions.
    • Conservative and risk-averse investment strategy among local stakeholders.
  • To address these challenges, the Lab is introducing a new regional program targeting LAC countries in 2024. The Lab will select two ideas, one each for adaptation and mitigation to climate change.
    • Mitigation-focused ideas should accelerate the transition to a net zero economy in LAC by reducing greenhouse gas emissions and mobilizing private capital.
    • Adaptation-focused ideas should aim to channel investment into building climate resilience and responding to growing climate risk, including at a systemic level, in LAC.
  • The U.K. Department for Energy Security & Net Zero and the U.S. Department of State support the Lab LAC regional program.
• The Philippines
  • In line with Philippine climate goals, nature-based solutions (NBS) offer significant opportunities to increase resilience to climate impacts and address biodiversity loss while also supporting sustainable and inclusive economic growth. NBS encompasses both green-grey and natural infrastructure with specific NBS project opportunities in the country. These include, but are not limited to, topics such as flood risk management, domestic wastewater treatment, coastal hazards adaptation, and protection and restoration of forests, mangroves, and wetlands.
  • With funding from Global Affairs Canada through the United Nations Development Programme, the Lab seeks one solution that mobilizes private climate finance investment in the Philippines with the potential to scale across the Asia-Pacific region. The successful idea will focus on blended finance and financial innovation in NBS, though the Lab will still accept non-NBS solutions for consideration in the other thematic streams. The minimum threshold to qualify for the Phillipines stream is to have the Phillipines as one of the primary target markets.
• Agriculture and Food Systems
  • The ClimateShot Investor Coalition (CLIC) has been formed to address this challenge. CLIC is an action-oriented group for leaders in the impact investment community working in agriculture and food systems. This member-driven coalition aims to collectively scale up and accelerate finance for agriculture and food systems globally, with the goal of shifting them to a low-carbon and climate-resilient pathway by 2030.
  • With support from the U.K. Foreign, Commonwealth, and Development Office, CLIC has partnered with the Lab to develop an innovative solution to accelerate and scale up climate and nature finance for agriculture and food systems. The selected solution will demonstrate how to bridge demand and supply, making it easier for businesses and organizations in the sector to access the financing they need.
• Climate Adaptation
  • With the support of the U.S. Department of State, the Lab is seeking proposals for innovative financial instruments and solutions that channel investment into building climate resilience and responding to growing climate risk, including at a systemic level. There is a critical need to develop and scale a broad array of financial solutions – including debt and equity facilities, results-based instruments, project finance, and insurance mechanisms – that enable capital to flow to adaptation.
  • Submissions should focus on climate-stressed regions in developing countries and identify how the proposed financing approach would address specific physical climate risks and overcome barriers to mobilizing finance for climate adaptation. Submissions should also include a plan to phase down public financial support while offering attractive risk-adjusted returns to investors to scale private investment. Lastly, ideas should demonstrate the potential to avoid maladaptation, support improved livelihoods, and strengthen the broader financial ecosystem in the implementation countries.
• Open Idea/Climate Mitigation
  • The Lab is looking for one outstanding concept for a financial instrument that targets investment opportunities in decarbonization that does not fit into the set sectoral and regional streams.
  • While the Lab will consider mitigation-relevant ideas from any region or sector, they are interested in scalable renewable energy solutions (especially energy access), low-carbon transit, buildings, industrial sectors, and/or the just energy transition, and the phase-out of coal and fossil fuels.
  • Submissions should explain clearly why the target sector and geography identified are key for climate finance mobilization and how they would benefit from the Lab’s support.
• High Integrity Forests
  • Despite the considerable value generated through environmental services, HIFs continue to face a chronic lack of investment due to several key barriers, including the difficulty in establishing additionality for REDD+ results-based payments and carbon markets, small ticket size, higher risk profiles, transaction costs, land tenure, risk of regulatory non-compliance, and market development.
  • With support from the U.K. Department for Energy Security & Net Zero, the Lab seeks innovative finance solutions focused on mobilizing private capital for the protection and sustainable management of high-integrity forests across emerging economies, based on the Forest Landscape Integrity Index.
  • Successful ideas will demonstrate actionable strategies to overcome investment barriers and facilitate private capital mobilization for HIFs through blended finance mechanisms and other de-risking approaches such as insurance. Moreover, successful ideas will deploy robust monitoring and measurement components.

Why submit an idea?

Selected ideas receive guidance from high-level leaders from the public and private sectors, who contribute expertise, political support, and financial capital.

• See all Lab members
  • Selected ideas also benefit from robust analysis, stress-testing, and development by Climate Policy Initiative’s team of experts.
• Meet the Lab experts
  • $ 250 k
    • value of in-kind analytical and communications support received by selected Lab ideas
  • $ 1.1 bn
    • invested by Lab members and observers
  • $ 3.5 bn
    • mobilized by endorsed Lab instruments

What happens if your idea is selected?

If your idea is selected by Lab Members, you will work with a team of analysts, key stakeholders, and experts to:

• Develop or refine the mechanics of your idea.
• Survey the market landscape of comparable solutions and assess the idea’s viability and impact potential.
• Develop robust financial modeling.
• Assess and document potential social and environmental impacts.
• Map risks and risk mitigation strategies.
• Develop a detailed implementation plan.
• Create promotional content and pitch your ideas to donors and investors.
• Potentially receive endorsement from the Lab.
• Get implementation support to execute go to market strategy.

Assessment Criteria

A set of key criteria guides how submitted ideas are assessed and ranked:

• Actionable
• Catalytic
• Innovative
• Financially Sustainable
• Value Add

For more information, visit The Lab.