Results Based Climate Finance is an evolving approach to sustainable development that aims to incentivize climate action, create and expand carbon markets, and stimulate innovation. Through this approach, investors or others (including donors) pay an entity to achieve, report on, and independently verify a set of pre-agreed performance targets related to climate mitigation. Basically, reducing greenhouse gas emissions in a sustainable manner.
The Emission Reduction programs use selected methodologies for carbon accounting, to measure the reductions generated by their programs, which become the results that lead to climate finance flowing.
The value of these programs depends on the robustness of the methodology used, and the stronger the methodology the more robust the results. Of course all programs, which implement the activities that generate the results need to be tailored to the local context, and be designed to maximize social impact and social inclusion.
Results Based Climate Finance programs improve accountability and funding effectiveness, because payments are only disbursed after results have been verified. As such, investors can be more certain that their contributions are creating a real impact on the earth.
