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Enabling Climate Finance

Immediate action on climate change is predicated upon

• Readily available technology

• Governance and Measurement, Reporting & Verification standards

• Financial instruments, private capital, and public funds

 

Public with private

• Private sector cannot address climate change alone (Shandi Modi, 2006)

• Public-private ‘handshake’ is a thesis of CRA

 

Actual funding is not meeting promises

• The CPI suggests that 2011/12 climate finance flows reached US$343-385 billion

• IEA estimates that between 2012 and 2050, US$1 trillion needs to be invested in the energy sector each year

• Multilateral institutions are often seen as catalysts for the private sector but have a high level of risk-aversion

• Institutional investment needs to scale up

Climate Finance

Opportunities

Plenty of dollars are pledged and available from:

• Government institutions,

• Multilateral organisations

• Development funds

• EU Structural funds & EU budget

Debt markets can and should be opened up... return thresholds are currently very low...

Barriers

Ø Lack of standards and transparency

Ø Lack of comparability with other asset classes

Ø Inability to account, value or margin assets on balance sheet

Ø MRV and performance risks

Ø National and regional risk not defined or assessed independently

Ø Perception of risks associated with climate finance are greater than they should be

Solutions

Ø IDEAcarbon has focused on creating proven and accepted solutions to break down these barriers

Ø The commitment of IDEAcarbon and Regions 20 members can open the tap of available finance

Ø More investment needed in creating a climate finance architecture

 

To access AVAILABLE CAPITAL the following are needed:

1. Independent Risk Assessments

2. Relevance / Metrics / Valuation / Performance of Energy Efficiency / Carbon

3. Applied to infrastructure and economic development spending

Catalysing

IDEAcarbon has begun to address some of the barriers limiting climate finance

Ø Technical expertise and proven track-record

Ø Ratings process at an institutional standard for highlighting risk factors

Ø Unique tools for risk profiling and management

Ø Insight into regional policy