A Guide to Financing Clean Air

This is a guide to the financial instruments, mechanisms, and institutional arrangements that can support clean air action. It draws on a scoping review of academic and grey literature, feedback provided during technical review, and practitioner consultations across multilateral development banks (MDBs) and World Economic Forum (WEF)’s Global Future Council on Clean Air.

This guide is written for practitioners who have already identified action to reduce air pollution, or are considering one and need to work out how to finance it. It is not an exhaustive introduction to air quality or a list of every financing mechanism in use.

One practical question this guide can help you answer is: Given this intervention, who captures its value, who can pay for it, and which instrument fits?

• If you are part of an MDB or development finance institution (DFI) project team structuring a financing operation: you may start with the taxonomy (Section 3) to classify your intervention, then use Section 4 to identify the repayment source, and Section 5 to identify a suitable financing instrument and use the decision-tree. Section 6.4 sets out what MDBs can do.
• If you are a private investor or part of a financial institution and are assessing whether a clean air intervention is suitable for investment: start with Section 6.2 (conditions for investment) and use Table 4 to assess which financial instruments may be suitable before going further.
• If you work in a ministry of finance and clean air is part of your fiscal decisions: Section 4.1 (pollution pricing) and Section 9.1 address revenue and budget questions.
• If you work in a city or town administration: Sections 6.1 and 9.1 set out the steps to consider, starting with regulation and procurement before seeking external finance.

While interconnected, each section can be read individually and can stand largely on its own; you do not need to read the guide end to end to use it for a specific decision.