An enormous global win-win opportunity
More than 70% of cost-effective mitigation to achieve global goals in the Paris Agreement would occur in the Global South according to Enerdata. Although many countries in the Global South are deeply concerned about climate change, most are faced with many competing priorities, high interest rates, and limitations in capacity. They are not on track to achieve these reductions.
Meanwhile, advanced economies express high levels of concern for climate issues and have substantial wealth to fund mitigation. They face relatively high abatement costs within their borders6 yet have political concerns about spending resources abroad, even it is more cost-effective for global emission reduction.
There is an enormous global ‘win-win’ opportunity but it’s not easy to make it happen. The difficulty of comprehending global solutions, lack of trust and strong incentives to free-ride all hinder progress.
Climate change mitigation costs differ widely across different countries. Countries with high marginal abatement costs are willing to transfer significant resources to increase the speed of transition to zero net emissions in countries with lower marginal costs.
Currently there is no effective, credible international mechanism promoting emission reductions in all sectors, but the cooperative approaches under Article 6 of the Paris Agreement provide space for innovation. Article 6.2 enables bilateral, minilateral or multilateral agreements for trading mitigation between countries. Article 6.4 creates the centralized Paris Agreement Crediting Mechanism.
Climate Action Teams
A ‘climate action team’ (CAT) offers a conceptually new model to enable host and partner countries to cooperate to genuinely reduce global emissions and enable more ambitious Nationally Determined Contributions in both. It can reassure host countries about the return to their investment in emissions reductions beyond the NDC and leverage private investment. The large scale of a CAT facilitates the demonstration of additionality and the avoidance of carbon leakage. Climate Action Teams can take advantage of existing national monitoring and reporting frameworks, increasing transparency.
Key resources:
Funding mitigation abroad dialogue
Effective international cooperation to achieve ambitious global goals requires the transfer of resources, capital, expertise and cash, from the ‘North’ to the ‘South, yet transfers so far have been limited and public narratives in the North are often negative about the value of these transfers.
In September 2025, a project team from Motu Economic and Public Policy Research, European University Institute, and the University of Zürich convened the Funding Mitigation Abroad Dialogue.
This brought together 27 researchers, officials, and practitioners (in addition to project team members) from 14 advanced economies to discuss:
- Which public narratives currently dominate discussions on funding mitigation abroad, especially in the global south
- Opportunities to shift narratives
- Methodologies for future research through surveys, experiments, and interviews.