Mitigation finance
Climate finance directed at reducing greenhouse gas emissions or enhancing sinks, such as renewable energy, clean transport and efficient buildings.
Adaptation finance gap
The difference between the estimated cost of adaptation in developing countries and the adaptation finance actually flowing to them; UNEP puts it at USD 284-339 billion a year to 2035.
Baku to Belém Roadmap to 1.3T
A process launched under the NCQG decision, led by the COP29 and COP30 Presidencies, on how to scale climate finance to developing countries to at least USD 1.3 trillion a year by 2035.
New collective quantified goal (NCQG)
The climate finance goal set at COP29 in Baku: at least USD 300 billion a year by 2035 for developing countries, with developed countries taking the lead, alongside a call to scale finance from all sources to at least USD 1.3 trillion a year.
Climate finance
Finance that aims at reducing emissions and enhancing sinks of greenhouse gases and at reducing vulnerability and increasing the resilience of human and ecological systems to negative climate change impacts (UNFCCC SCF).
Insurance-linked securities (ILS)
Securities whose returns depend on insurance risk, including catastrophe bonds, sidecars and collateralised reinsurance.
Expected loss
The modelled average annual loss of principal to investors, expressed as a percentage of the bond’s size; used with the spread to price the risk.
Industry loss index trigger
A trigger based on estimated insured losses for the whole market from an event, rather than the sponsor’s own losses.
Indemnity trigger
A trigger based on the sponsor’s actual losses from the covered event, which minimises basis risk for the sponsor but takes longer to settle.