Climate Action Catalyst Fund (CACF):

The Climate Action Catalyst Fund (CACF) is a pioneering initiative launched by the Asian Development Bank (ADB) to accelerate decarbonization efforts across Asia and the Pacific. Operational since January 1, 2024, the CACF functions under Article 6 of the Paris Agreement, which facilitates international cooperation through carbon markets.

🔑 Key Features:

1. Upfront Carbon Finance:

   • Provides upfront financing for high-impact climate mitigation projects.

   • Addresses the “valley of death” in green tech financing by enabling projects to secure funds during critical development phases.

2. Carbon Credit Acquisition:

   • Purchases carbon credits from mitigation activities in developing member countries (DMCs).

   • Allows these countries to monetize their emission reductions.

3. Mobilizing Investments:

   • Targets over $100 million from national and subnational governments, as well as private sector investors, to support transformative climate actions.

4. International Collaboration:

   • Facilitates the transfer of carbon emission reductions between countries.

   • Supports cooperative approaches to meet nationally determined contributions (NDCs).

🤝 Contributions and Partnerships:

1. Swedish Energy Agency:

   • Committed 300 million Swedish krona (~$27 million) to the CACF.

2. Norwegian Government:

   • Pledged up to $50 million to promote low-carbon investments.

1. Accelerate Decarbonization:

   • Support DMCs in achieving and enhancing their NDC targets through scalable mitigation projects.

2. Promote Environmental Integrity:

   • Ensure financed projects maintain high standards of environmental integrity and contribute to sustainable development.

3. Develop Carbon Markets:

   • Serve as a model for operationalizing international carbon markets under Article 6.

   • Provide price signals and foster market development.

The CACF’s first transactions are anticipated in 2025, setting benchmarks for future carbon market operations. By providing upfront financing and fostering international cooperation, the fund aims to catalyze significant investments in climate mitigation across the Asia-Pacific region.