Annual tracked total ﬁnancial ﬂows for climate mitigation and 
adaptation increased by up to 60% between 2013/14 and 2019/20, 
but average growth has slowed since 2018 (medium conﬁdence) and 
most climate ﬁnance stays within national borders (high conﬁdence). 
Markets for green bonds, environmental, social and governance and 
sustainable ﬁnance products have expanded signiﬁcantly since AR5 
(high conﬁdence). Investors, central banks, and ﬁnancial regulators are 
driving increased awareness of climate risk to support climate policy 
development and implementation (high conﬁdence). Accelerated 
international ﬁnancial cooperation is a critical enabler of low-GHG and 
just transitions (high conﬁdence). {WGIII SPM B.5.4, WGIII SPM E.5, 
WGIII TS.6.3, WGIII TS.6.4}
Economic instruments have been effective in reducing emissions, 
complemented by regulatory instruments mainly at the national 
and also sub-national and regional level (high conﬁdence). By 2020, 
over 20% of global GHG emissions were covered by carbon taxes or 
emissions trading systems, although coverage and prices have been 
insufﬁcient to achieve deep reductions (medium conﬁdence). Equity and 
distributional impacts of carbon pricing instruments can be addressed 
by using revenue from carbon taxes or emissions trading to support 
low-income households, among other approaches (high conﬁdence). 
The mix of policy instruments which reduced costs and stimulated 
adoption of solar energy, wind energy and lithium-ion batteries 
includes public R&D, funding for demonstration and pilot projects, and 
demand-pull instruments such as deployment subsidies to attain scale 
(high conﬁdence) (Figure 2.4).