Effective responses to climate change require efforts by both the public and private sectors to develop and disseminate new environmentally sound technologies (ESTs) on a global scale, as well as to adapt them to local needs. However, due to a number of market failures and specific uncertainties, the spread of green technologies is less than optimal, which necessitates additional incentives. Based on a review of recent literature, the present Global Challenges
Report examines the role of enabling factors for the development, diffusion and financing of ESTs. It finds that relevant policies promote, among others, funding
mechanisms, business partnerships, and the protection and enforcement of intellectual property rights. The Report pays particular attention to the needs
in developing countries, including emerging market economies, where the aforementioned challenges are particularly pronounced.