To meet the temperature goals of the Paris Agreement, decarbonisation measures will need to be financed across all sectors of the economy and most importantly in energy-intensive and hard-to-abate sectors, and in particular in emerging markets and developing economies. As governments and the private sector are ramping up their net zero pledges and developing transition finance approaches, robust corporate transition plans and strategies will be crucial to ensure a credible and meaningful transition towards net zero. Building on recent OECD work on transition finance, this high-level plenary will bring together influential actors to discuss key priorities and policy measures urgently needed to incentivise action to shift financing towards climate and environmental policy objectives in hard-to-abate sectors.

Financial markets have a critical role to play in facilitating a climate transition by helping to assess the net benefits, channelling capital to entities that are transitioning to renewables, and providing appropriate surveillance and verification to support an orderly transition to net zero. While noteworthy progress has been made, considerable challenges hinder the efficient mobilisation of capital. This session will discuss the launch of OECD Policy Recommendations to promote greater comparability of climate transition metrics, as well as transparency and interoperability of climate finance and ESG approaches to support the orderly transition to low-carbon economies.

COP26 and the Glasgow Climate Pact highlighted the urgency of scaling up action and support to enhance adaptive capacity, strengthen resilience and reduce vulnerability to climate change. This raises the need to ensure that infrastructure investments mitigate the impacts of climate change while also building adaptation capacity and resilience. This session will bring together governments to discuss the need to scale up financing for infrastructure resilience. This session will focus on how governments are taking into consideration the long-term value and costs of adaptation in infrastructure planning and investment. The session seeks to shed light on how governments integrate such considerations into their financial planning to establish an integrated approach to adaptation and resilience of infrastructure.

In order to meet the temperature goals of the Paris Agreement, the IPCC estimates that emissions have to peak at the latest before 2025 and radically reduce thereafter. At the moment, the projected emissions of existing and planned fossil fuel infrastructure are likely to exceed net emissions of 1.5C pathways. Beyond retrofitting and decarbonising existing infrastructure through the use of renewable fuels and gases, this raises the question of how to incentivise the early retirement of polluting assets, where existing price signals are insufficient to mobilise private capital and therefore additional intervention is required. The purpose of this session is to discuss the challenges of early retirement and potential solutions to the problem.