Meeting the Climate Challenge: Using Public Funds to Leverage Private Investment in Developing Countries
‘Meeting the Climate Challenge: Using Public Funds to Leverage Private Investment in Developing Countries’ is the output of a public/private discussion coordinated by Lord Nicholas Stern, Chair of the Grantham Institute for Climate Change and the Environment at the London School of Economics. The main purpose of that discussion was to identify the most efficient instruments that Governments could use to leverage private finance and thereby enable sufficient financial flows to developing countries to achieve their mitigation and adaptation objectives.
The analysis and conclusions are detailed in five sections, written by experts from the private sector in collaboration with counterparts in the UK Government, and project managed by Giedre Kaminskaite-Salters, UK Department for International Development (DFID) and Mattia Romani, LSE Grantham Institute:
The Summary for Policy Makers covers key challenges and sets out the recommendations that emerged from public/private discussions.
Section one is an introduction to the topic of using public finance in order to leverage private investments in developing countries.
Authors: Mattia Romani, LSE Grantham Research Institute in collaboration with Melinda Bohannon, UK Department for Energy and Climate Change (DECC)
Section two proposes an analytical framework for looking at the case for government intervention in climate change, focusing on the various forms of market failures and the criteria for public sector mechanisms.
Authors: Alex Bowen, LSE Grantham Research Institute; Mattia Romani, LSE Grantham Research Institute; Dimitri Zenghelis, LSE Grantham Research Institute / Cisco
Section three considers ways of raising public finance, describing and analysing mechanisms through the capital markets.
Author: Mattia Romani, LSE Grantham Research Institute in collaboration with Leila Pourarkin, DECC
Section four considers spending public finance, through the use of ‘specific instruments for specific challenges’. It examines the nature of risk in key sectors and what an appropriate package of measures could look like for clean energy and technology, energy efficiency, forestry and adaptation in order to derive specific recommendations for each sector. Section co-ordinator: Giedre Kaminskaite-Salters, DFID
Energy and low-carbon technologies
Authors: Mark Dominik, Deutsche Bank; Sabine Miltner, Deutsche Bank; Virginia Sonntag-O’Brien, REN21/UNEP SEF; Eric Usher, UNEP SEFI in collaboration with Chris Taylor, DECC
Authors: Stuart Clenaghan, Eco System Services Limited in collaboration with Nick Godfrey, DFID
Authors: Josue Tanaka, EBRD; Alex Veys, Green Chicane
Authors: Christopher Bray, Barclays Bank; Maya Forstater, AccountAbility; Mandy Rambharos, Eskom; Sunny Sehgal, HSBC; Simon Zadek, AccountAbility in collaboration with Tamsin Ballard and Guy Howard, DFID
Section five reviews the elements of the global financial architecture that would be needed to underpin and enable the types of instruments discussed in the previous two chapters to be deployed.
Authors: Mattia Romani, LSE Grantham Institute, with analytical support from McKinsey & Company; World Economic Forum Task Force on Low Carbon Economic Prosperity (Investment Working Group)
The participants to the public/private discussion chaired by Lord Stern also included:
Alex Macgillivray (AccountAbility), Andre Bierman (EBRD), Christian Schumer (McKinsey), Chris Taylor (DECC), Claire Boasson (UNEP), Claire Abeille (HSBC), Eric Usher (UNEP), Helga Vanthournout (McKinsey), Ian Goldin (University of Oxford), James Rydge (LSE), Jan-Peter Onstweddder, Jenny Bates, John Llewellyn (Llewellyn Consulting), Abyd Karmali (Merrill Lynch), Karsten Neuhoff (University of Cambirdge), Kristi Hamilton (Chatham House), Laurence Tubiana (IDDRI), Mark Dominik (Deutsche Bank), Maya Forstater (AccountAbility), Neil McMurdo (HMT), Michel Colombier (IDDRI), Nick Joicey (HMT), Nick Robins (HSBC), Jeremy Oppenheim (McKinsey), Preston Llewellyn (Llewellyn Consulting), Rob Lake (APG Asset Management), Sabine Miltner (Deutsche Bank), Sam Fankhauser (LSE), Stuart Clenaghan (Eco System Services Limited), Sunny Sehgal (HSBC), Josue Tanaka (EBRD), Virginia Sonntag-O’Brien (UNEP).
The views expressed in these sections are those of the authors and do not represent the opinions of their institutions.