This handbook provides local policy makers and other interested readers with an overview of climate and carbon finance mechanisms, both existing and in development, and their relevance to the urban context. It has been prepared in response to a recognised need for a user-friendly guide to such mechanisms, their potential to help reduce greenhouse gas emissions from cities and buildings, particularly in developing countries, whilst generating income and other sustainable development benefits. It aims to help raise awareness among local stakeholders regarding climate and carbon finance and its potential in the built environment. It also aims to help local authorities to use carbon mechanisms as an opportunity to increase the energy performance of their district whilst creating additional revenue, improving resource efficiency and as part of their wider climate strategies.