"The Climate Auctions program tests multiple auction formats to deliver price guarantees that are intended to attract private sector investment while efficiently reducing emissions"

To ensure a livable planet in the future, we all need to step up to reduce greenhouse gas emissions. Governments alone will not be able to get this done. The private sector has a critical role to play in our collective action, bringing efficiency and innovation to make investments that will change our trajectory toward a greener future. Even with increasing levels of public support and promising new technologies, the financial cost of adopting cleaner practices is simply too great for some companies to act on their own. The private sector needs funding opportunities to step up climate actions and governments need efficient ways to allocate the limited money they have available to support them. New approaches to climate financing are necessary to meet this challenge.  

The World Bank has piloted one such approach – climate auctions. 

Climate auctions offer a win-win: For public funders, they deliver the most ‘bang’ for each public ‘buck’ spent on emission reductions – and fast! By bringing companies together to compete on the price at which they are willing to generate and deliver eligible climate results in the future, the auctions reveal which companies can implement the desired climate actions at the lowest incremental cost. For private firms, climate auctions provide an attractive – and certain – payout that allows them to make green investment choices with confidence. What’s more, is that climate auctions, when deployed at scale, could effectively make the private sector responsible for mass production of low-cost climate action and help increase the pace and impact of climate change mitigation

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