Climate finance involves flows of funds from developed to developing nations to help poorer countries to cut their emissions and adapt to climate change. The sources and governance of climate finance has been widely debated since the 2009 climate change summit in Copenhagen, where industrialised countries committed to giving $100 billion a year in additional climate finance from 2020 onwards. To get things going, immediate 'fast-start' finance of up to $30 billion was promised until the end of 2012.

Debate is incurred by discussions of how to spend the money. It is far from clear what activities would fall under the purview of "climate finance." It is clearly applicable for investment in renewable energy, for example, but less so for investments like child education, which may reduce population growth (and thus carbon emissions) in the long term but whose immediate effects (and possible returns) are much less clear.

It is also not entirely clear which economies or nations most deserve funds via climate finance. China, for example, has widely industrialized but still has hundreds of millions of citizens without consistent power. Further debates arise as to discretionary use of these funds. If an NGO or an investment bank channels investment for sustainable development to a nation, they will want assurance that the money will be well-spent, which may lead to a degree of oversight. This can lead to tension between local governments (especially if they have autocratic or kleptocratic tendencies) and their potential investors. (See also: Preparing Your Portfolio for Climate Change.)

The Paris Agreement, reached at the end of 2015, opened up new political channels for climate finance to flow through, and more nations, both developed and developing, are insisting on climate change mitigation efforts. While the issue is still hotly disputed, climate finance (and its controversies) will likely be a mainstay of future economic policy for all nations.

Sources

https://climatepolicyinitiative.org/publication/the-landscape-of-climate-finance/

http://www.investopedia.com/terms/c/climate-finance.asp

https://www.theguardian.com/environment/2013/apr/04/climate-change-renewableenergy