Aligning Policy-Based Finance with the Paris Agreement

Abstract

This paper discusses an approach for aligning policy-based operations (PBOs) from multilateral development banks with the goals outlined in the Paris Agreement. The Glasgow Climate Pact calls upon MDBs to accelerate the alignment of their activities with the Paris Agreement, but an approach for PBOs has not yet been determined. To be considered aligned, PBOs must promote long-term macro-fiscal stability and a just transition to climate neutrality by 2050.