Author: Yannick Glemarec

Date: 2011

(Full paper available here) 

What is it about? Over the past few years, policy-makers have developed regulatory and market-based instruments to help investments grow from 22 billion in 2002 to 220 billion in 2010. But a lot more needs to be done to shift the 178 trillions in financial assets. In the guidebook, the author develops a 4-step framework: identify priority mitigation and adaptation technology options, assess barriers to technology diffusion, determine the appropriate policy mix and select financing options to create an enabling environment. This last step involves a mix of public, market and private finance. The author analyses the importance of fair access to climate finance among developing countries, he describes the current climate finance landscape (channels, sources and stakeholders, and looks at options to improve the policy environment and catalyse climate capital. The last chapter presents country case studies that follow the 4-step approach.

Why we recommend reading this. In chapter 3, the author identifies a list of key enabling conditions (macro-economic, institutional and regulatory, social and behavioural, technical conditions, financial conditions). In chapter 5, the author discusses how to maximize the use of public finance, namely by using it to create the key enabling conditions that will allow markets and private investments to address climate change. This could include financing the early stages of clean technology developments (R&D). Creating the enabling environment will also require improved coordination among and access to existing funds. The author makes the case for sequencing and blending of sources and instruments of finance.