F ro m Clima te T a lk to Clima te Ac tio n: F ina nc ing - PowerPoint PPT Presentation

F ro m Clima te T a lk to Clima te Ac tio n: F ina nc ing NDCs CPI insig hts Ja me s F a lzo n Ang e la F a lc o ne r BRAZIL 20 St Dunsta ns Hill C HINA L o ndo n, UK EURO PE c lima te po lic yinitia tive .o rg INDIA INDO NESIA SO UT HERN AFRIC A UNIT ED ST AT ES 1

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T he inve stme nt g a p ota l c lima te inve stme nt e q ua le d $391 b illio n in 2014… T 840 b illio n ne e de d a nnua lly thro ug h 2030 fo r NDC imple me nta tio n o f o nly e ne rg y e ffic ie nc y a nd lo w- c a rb o n te c hno lo g ie s (I E A, 2015) – o ve ra ll inve stme nt ne e ds muc h hig he r 10.2 b illio n ple dg e d so far GCF c a n o nly do so muc h…. 3

I nve stme nt mo b iliza tio n re q uire s inte g ra te d a ppro a c he s: F inanc e is only one part of the story LAW, REGULATION, GOVERNANCE ADAPTATION & CLIMATE REGULATORY RESILIENCE REFORM ENERGY EFFICIENCY & REGULATORY, POLICY & BUILDINGS FINANCIAL MARKETS GAPS & EFFECTIVE BARRIERS FINANCIAL CITIES IMPLEMENTATION ANALYSIS INSTRUMENTS COUNTRY - INVESTMENT MOBILIZATION ACTORS RENEWABLE ENERGY FINANCE & INVESTMENT ECONOMICS PLANS TRANSPORT FINANCE & INSTITUTIONAL PROCUREMENT INDUSTRIAL COORDINATION PROCESSES FEASIBILITY ASSESSMENT WASTE S AGRICULTURE TECHNICAL & LAND USE 4

We b ina r o ve rvie w • Wha t a re the so urc e s o f fina nc e fo r NDCs? • Wha t a re the mo st e ffe c tive po lic ie s a nd instrume nts to stimula te inve stme nts? • Ho w c a n the pub lic a nd priva te se c to r a lig n to a c hie ve NDC inve stme nt g o a ls? 5

Wha t a re the so urc e s o f fina nc e fo r NDCs? 6

T o ide ntify so urc e s o f fina nc e , ne e d to unde rsta nd the c lima te fina nc e la ndsc a pe 7

T he ma jo rity o f fina nc e wa s ra ise d a nd spe nt in the sa me c o untry Be c a use do me stic inve stme nt do mina te s, it is vita l to g e t na tio na l po lic ie s rig ht T ota l fina nc e Priva te fina nc e spe nt dome stic a lly spe nt dome stic a lly 74% 92% 8

At the na tio na l le ve l, unde rsta nding fina nc e flo ws is a use ful first-ste p to stra te g ic pla nning 9

Co te d’ I vo ire RE DD+ stra te g y de ve lo pme nt: Se c to r le ve l tra c king • RE DD+ is a n impo rta nt pa rt o f Co te d’ I vo ire ’ s NDC, whe re the y ta rg e t a 28% re duc tio n in e missio ns c o mpa re d to BAU b y 2030 • Curre ntly pre pa ring a la ndsc a pe o f fina nc e flo ws in 2015 to suppo rt the de ve lo pme nt o f a n inve stme nt pla n a s pa rt o f Co te D’ I vo ire ’ s RE DD+ stra te g y • T he la ndsc a pe will suppo rt c o -o rdina ting la nd-use fina nc e flo ws a mo ng st Ministrie s, do no rs, a nd priva te se c to r, ide ntifying a dditio na l po te ntia l so urc e s, a nd de ve lo ping a b a se line a g a inst whic h to me a sure pro g re ss 10

Wha t a re the so urc e s o f fina nc e fo r NDCs? • T he re a re a va rie ty o f diffe re nt so urc e s, ho we ve r do me stic so urc e s will b e ke y. • Give n tha t e ve ry c o nte xt is diffe re nt, ma pping the c urre nt fina nc ing la ndsc a pe a t the na tio na l le ve l is a use ful ste p fo r inve stme nt mo b iliza tio n stra te g y de ve lo pme nt. 11

Wha t po lic ie s a nd instrume nts a re ne e de d to mo b ilize inve stme nt? 12

Wha t is ho lding b a c k priva te inve stme nt? • Viability gaps suc h a s inc luding the re la tive ly hig he r c o st o f inve stme nts; • Risk gaps suc h a s c urre nc y risk, o r risk o f po litic a l unre st; a nd • Knowle dge gaps suc h a s la c k o f fa milia rity with ne w te c hno lo g ie s. 13

T o mo b ilize inve stme nt, ‘ via b ility g a ps’ b e twe e n b usine ss a s usua l a nd g re e n inve stme nts ma y e xist 14

T he re a re fina nc ia l instrume nts tha t c a n re duc e c o sts... 15

...a nd instrume nts tha t c a n inc re a se re ve nue . 16

Mitig a ting risks is ke y to ma ke priva te inve stme nts c o st-c o mpe titive 17

Wha t po lic ie s a nd instrume nts a re ne e de d to mo b ilize inve stme nt? • Via b ility, risk a nd kno wle dg e g a ps a re ho lding b a c k priva te inve stme nts. • Diffe re nt a ppro a c he s a re a va ila b le to o ve rc o me the se g a ps. • T he rig ht c o mb ina tio n o f a ppro a c he s c a n inc re a se the impa c t o f pub lic fina nc e b y mo b ilizing mo re priva te inve stme nt fo r le ss c o st. 18

Ho w c a n the pub lic a nd priva te se c to r a lig n inste re sts to a c hie ve NDC inve stme nt g o a ls? 19

Priva te fina nc e a nd pub lic fina nc e a re c lo se ly inte rde pe nde nt 20

Go o d a lig nme nt b e twe e n pub lic a nd priva te inte re sts is a ke y suc c e ss fa c to r to sc a ling inve stme nts • Pub lic -priva te c o o pe ra tio n c a n ta ke ma ny fo rms: – F o rma lize d pub lic -priva te pa rtne rships (i.e . Jo int inve stme nts in infra struc ture ) – De ve lo ping e na b ling e nviro nme nts (i.e . F a vo ra b le L a ws a nd Re g ula tio ns) – Suppo rting ne w a nd inno va tive a ppro a c he s to so lving c o mple x c ha lle ng e s 21

Bring ing pub lic a nd priva te a c to rs to g e the r c a n he lp pro mo te inno va tio n • By c o nve ning pub lic a nd priva te a c to rs, the se initia tive s fa c ilita te de ve lo pme nt o f inno va tive instrume nts tha t a re o ve rc o ming pe rsiste nt b a rrie rs suc h a s c urre nc y risks, hig h- up-fro nt c o sts, la c k o f a c c e ss to c a pita l, a mo ng st o the rs. • T he Glo b a l I nno va tio n L a b ha s re sulte d in funding c o mmitme nts o f USD 500 millio n, with b illio ns o f do lla rs in like ly le ve ra g e d inve stme nts. 22

Climate-Smart Lending Platform Many of the world’s 450 million smallholder farmers are highly vulnerable to climate change. At the same time, credit providers with smallholder lending portfolios – currently estimated at 50 billion dollars globally – are also exposed to climate risk. The CSLP brings together the tools, actors, and finance necessary to help lenders incorporate climate risk in their loan portfolios while incentivizing the adoption of climate-smart farming methods by smallholders. 23

DEVELOPING HARMONIZED METRICS FOR PAY AS YOU GO SOLAR • A billion people lack access to electricity • Pay As You Go (PAYG) distributed solar has emerged as a leading business model to address this need, and commercial debt finance is required to reach scale – but at the moment it is lacking • WBG is trying to introduce harmonized portfolio performance metrics to help facilitate securitisation of consumer debt and crowd-in commercial lending 24

Ho w c a n the pub lic a nd priva te se c to r a lig n inte re sts to a c hie ve NDC inve stme nt g o a ls? • Mo b ilizing inve stme nt re q uire s a lig nme nt b e twe e n pub lic a nd priva te a c to rs. • L o o king b e yo nd tra ditio na l pub lic priva te inte ra c tio n a nd using ne w tools a nd ne w par ships c a n b e tne r e ffe c tive to g o fro m ‘ ta lk to a c tio n’ . 25

T hank yo u fo r yo ur atte ntio n! Clima te Po lic y I nitia tive (CPI ) wo rks to impro ve the mo st impo rta nt e ne r gy a nd land use po lic ie s a ro und the wo rld, with a pa rtic ula r fo c us o n financ e . We suppo rt de c isio n ma ke rs thro ug h in-de pth a na lysis o n wha t wo rks a nd wha t do e s no t ja me sfa lzon@c pic lima te fina nc e .or g a ng e la fa lc one r @c pic lima te fina nc e .or g BRAZIL 20 St Dunsta ns Hill C HINA L o ndo n, UK EURO PE c lima te po lic yinitia tive .o rg INDIA INDO NESIA SO UT HERN AFRIC A UNIT ED ST AT ES