ID | 170835 |
Title Proper | Financing the green transition |
Other Title Information | attracting capital through financial innovation |
Language | ENG |
Author | Monaca, Sarah La ; Spector, Katherine ; Kobus , James |
Summary / Abstract (Note) | Combating climate change at a global scale requires dramatic mobilization of capital markets. By 2035, more than $53 trillion will need to be invested in energy supply and efficiency in order to achieve climate targets laid out in the 2015 Paris Agreement. Interest and participation in sustainable finance continues to grow: environmental, social, and governance (ESG) investing assets under management totaled $30.7 trillion (of which $1 trillion is specifically classified as sustainability-themed) at the start of 2018, representing a 34% increase over the preceding two years. Yet, the capital that is available for investment in sustainable assets may not be well-matched with the pipeline of projects in search of financing. Green asset classes, including renewable generation, infrastructure, energy efficiency, and clean transport, are often inherently novel, small, and/or disaggregated. This makes them difficult and expensive to combine into investment-ready formats, preventing capital from being deployed on the timescale required to enable a quick energy transition. Moreover, market barriers exist with respect to early-stage financing and proving the viability of new markets and business models. In this article, we explore the hurdles and barriers that financial actors must overcome to ensure efficient capital matching that bridges the gap between climate awareness and meaningful climate investment |
`In' analytical Note | Journal of International Affairs Vol. 73, No.1; 2020; p 17-32 |
Journal Source | Journal of International Affairs 2019-12 73, 1 |
Key Words | Climate Change ; Environmental ; Capital Development Authority ; Green Transition ; Paris Agreement ; Climate Investment |