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What is sustainable, environmental, carbon and climate finance?

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As per Berkeley, University of California (2017), the sustainable practice for creating economic and social value through financial models, products, and markets over time is known as Sustainable finance. The investment is accounted for more expansive, comprehensive, and inclusive for considering the environmental, social, and governance issues and aspects.

The finance and investment that targets the ecological environment (air, water, soil, etc.) are known as Environmental finance. It is regarding environmental damage as a financial risk. As per this particular financial scheme, harmful projects or that have the potential to damage the environment are not encouraged by being funded or financed.

The aim of providing resources to projects that can reduce carbon dioxide emissions and other Greenhouse Gases is known as Carbon finances. Through the emission process, the market can be traded and in versatile ways, the carbon finance can be designed in spot and derivative markets are possible. Investment in the emission trading market is possible through a carbon fund.

The activities of climate change adaptation and mitigation can be supported by Climate finance so that a low-carbon economy can be achieved and climate-resilient development can be implemented. Adaptation projects that are excluded from carbon finance can also be supported by Climate finance.

Source:- Handbook of Green Finance by Jeffrey D.Sachs et.al.

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