Connecting countries to climate technology solutions
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Leveraging private investments in climate change mitigation

Publication date:
A. Pegels (ed)
Type of publication:

Transformation to a low-carbon economy requires a considerable increase in funding as well as quick and vigorous policy action. Public finance comes nowhere near to meeting the needs of climate change  mitigation - scaling up public funds is important and necessary, but it is not enough in itself. This paper outlines some further requirements in order to finance climate change mitigation. Mitigating the impacts of climate change requires large-scale technology deployment and, in turn, a considerable increase in funding, as recognised in the Bali Plan of Action, with its building blocks of mitigation, adaptation, technology transfer and financing. However, while multilateral agreements can influence funding, their direct influence on technology transfer is limited. Technology transfer is based on private-sector activities. Multilateral agreements can and must establish enabling frameworks and provide financial support, but they cannot do much more.Key recommendations include:

emission reduction commitments are among the most important requirements - to plan their investments, private companies need appropriate and long-term market signals and incentives
the growth of private investment in clean technologies presupposes incentives that foster demand for such technologies and so create reliable and strong markets
where the private sector is involved, it is particularly important for companies and investors to be heard and included in consultations
to promote technology diffusion, climate policy may also focus on active and targeted technology promotion, including public support for research and development as well as technology  demonstration and deployment in developed and developing countries.