The European Union, China, India and several other countries teamed up on Friday to coordinate rules and standards for trillions of dollars of private and public "green" investment needed over decades to prevent irreversible climate change.
The initiative called the International Platform on Sustainable Finance (IPSF), also involves Argentina, Chile, Canada, Kenya and Morocco - a group responsible for 44% of the world's GDP and the same amount of carbon dioxide emissions.
Its aim is not to raise money, but to harmonize rules on what is sustainable, or "green" investment, across the world so that private capital can flow into it more freely.
"To deal with climate change Europe can only do so much because Europe generates only around 9% of emissions," European Commission Vice President Valdis Dombrovskis told Reuters on the sidelines of International Monetary Fund meetings in Washington where the initiative was launched.
"While public funding will be vital for the transition, it cannot pay the massive bill alone. We also have to tap into private capital to raise the trillions needed," he said.
"No national budget can pay for that on its own. Nor should it. Countries should link their sustainable financing needs to global financial markets to scale up green investment at the level that the world needs," he said.
The European Union's executive arm, the European Commission, in June sought to boost the flow of private money to tackle climate change by publishing guidelines on what qualifies as an environmentally friendly investment.
But China and some others also have their own rules on that, which shows the need for a joint initiative to keep them harmonized to avoid market fragmentation, Dombrovskis said.
The European Union has agreed to substantial reductions of carbon emissions by 2030 and the Commission wants the bloc to reduce them to zero by 2050 to help stop global warming, the rise of average worldwide temperatures.
To cut emissions by 2030, many sectors of the economy, such as manufacturing, agriculture and energy, require an extra annual investment of between 180 and 290 billion euros and even more is needed to achieve zero emissions by 2050.
"We need to have the international community on board and that is why we are launching the international platform for sustainable finance to exchange best practices, to coordinate our approach," Dombrovskis said.
The United States, the world's biggest economy which is also second biggest in terms of CO2 emissions after China, was conspicuously absent from the initiative as President Donald Trump maintains that global warming is a "hoax."
"The US it is not among the founding members, but we see lots of interest from US states, from the industry, from the financial sector," Dombrovskis said.