Results-based finance in the Paris Era: Considerations to maximise impact

In order to reach the goals of the Paris Agreement, it is essential to rapidly move from a zero-sum offsetting approach towards rapid transitions to decarbonise all emitting sectors. Though originally developed for offsetting, using aspects of carbon market mechanisms to deliver results-based finance can have an important role in climate change mitigation and climate finance mobilisation goals. Such finance can either go towards helping host countries achieve their NDCs or in order to create an overall climate benefit. Various aspects and infrastructure built for carbon markets can be used as a vehicle to deliver such results-based finance. This paper discusses a number of limitations of using aspects of carbon market mechanisms for results based finance, ways to address some of those challenges and suggests a niche role for such results based finance to play in the Paris era.