In order to achieve ambitious national climate goals, the use of economic instruments such as crop and climate insurance, taxes, feed-in tariffs for renewable energy and other financial incentives are important enablers. The CTCN is collaborating with relevant stakeholders to support local entrepreneurs, small- and medium enterprises and larger businesses, as well as governmental decision-makers, in identifying these economic instruments. Furthermore the CTCN provides technical assistance for strengthening countries’ capacity to access international financing for climate technology opportunities. Below you will find related publications, partners, CTCN technical assistance, technologies and other information for exploring this topic further.
Climate change poses enormous financial challenges. The combined cost of mitigating and adapting to climate change has been estimated at several hundred billion U.S. dollars per year, of which the majority will have to be invested in developing countries. International and domestic climate finance is therefore essential to reducing climate risk and avoiding the worst impacts of climate change.
Financial incentives have been widely implemented by governments around the world to support scaled up deployment of e.g. renewable energy and energy efficiency technologies and practices. In terms of private funds, governments set the rules for the markets in which investors seek profits. If current market rules are failing to attract or drive private investors into lower-carbon, more climate-proof alternatives, governments can introduce policies or incentives to help address these market failures.
Responds to the following needs
Climate insurance against crop loss is common in developed country agriculture where farmers insure against crop loss due to extreme climatic events such as flooding or drought. Typically payments are made on the basis of the crop loss from on-farm inspections. However the on-farm inspections can be expensive and potentially subjective. Table 1 gives a summary of different kinds of agricultural climate insurance schemes.
To support building a gender-responsive, climate resilient energy sector, 13 West African nations asked the CTCN to provide technology and capacity building assistance in four strategic areas:
Impacts of energy subsidies, the impacts of energy sector reform, and workable or appropriate mitigation measures associated with any reforms are extremely context specific. Nonetheless, strong evidence indicates that in many countries a significant proportion of subsidy benefits are captured by well-off households, suggesting a general phenomenon of energy subsidy inefficiency if the desired policy objective is to target income and energy access benefits to women and men living in poverty.