Low-income countries are working to improve sustainability and build resilience to climate change, but more investment in needed, the Institute for Environment and Development (IED) has said.
Nanki Kaur, senior researcher at the IED said that there was a growing appetite for sustainable investment in these areas but a finance gap remained in many countries. Kaur’s comments follow a conference in Ethiopia, which discussed how low-income countries were transitioning to a cleaner economy.
Writing for Responding to Climate Change, Kaur said, “The challenge for developing nations is that the costs of making the transition to climate resilient green economies will be huge, and the actions needed come with very specific financing needs.
“On one hand, green economy initiatives have the potential to bring returns on capital investments and so can attract private investment. On the other hand, climate resilience is often a public good, and would ordinarily need public finance in the form of grants.”
Despite the fact investors poured an estimated $359 billion (£216 billion) into low-carbon and climate-resilient projects in 2012, Kaur identified three finance gaps.
The first is that the sum invested is only a small percentage of what is needed to tackle the global issue. This gap is described as especially “worrisome” for developing nations. For instance, at the conference, Rwanda estimated it faced a financing gap of $100m (£60m) per year over the next 20 years.
Secondly, private investment continues to “dominate” climate finance but often stays in developed countries because of the associated risks of placing money in a developing nation.
Finally, Kaur says 94% of the money invested in 2011 targeted mitigation – primarily renewable energy and energy efficiency. As many developing counties already have low-carbon emissions they instead need to prioritise adaption.
Despite the challenges they face, the conference highlighted that low-income economies are taking action to attract and mange both public and private investment for their climate change efforts. They are recognising the role of intermediaries, such as development banks, in mobilising finance; they are targeting different investors to suit the specific investment needs of climate resilience; and policymakers are focusing on financial planning systems.
Kaur wrote, “These evolving trends in the design of intermediaries, economic and financial instruments and financial planning systems show how many developing nations are taking important steps to ensure they are ready to receive, manage and disburse climate finance from both public and private sources as they make the transition to climate-resilient green economies.
“They are not just sitting waiting for money to flow. They are setting up the systems and institution that will create new money from old.”
Photo: oledoe via Flickr
Private investment in sustainable economy set to reach $10tn by 2020
Building a sustainable global economy
IPCC findings demand investment in a sustainable future, say investors
‘Dithering’ on green economy could costs UK billions, warns TUC
Like our Facebook Page
How Cities In Canada Are Addressing Climate Change
10 Tax Incentives for Businesses That are Lowering their Carbon Footprint
How to Manage Anxieties About Climate Change
Green Brands Must Understand Their Customers to Market Wisely
Key Necessities for Starting an Eco-Friendly Freelance Business
6 Ways To Overcome Cash Flow Challenges as a Green Business
Going Cashless Lowers Our Carbon Footprint and Has Other Pros and Cons
How to Be as Eco-Friendly as Possible on a Trip to New York
Why Brazed Plate Heat Exchangers Are Eco-Friendly
6 Steps For Making Crypto & Blockchain Eco-Friendly
Building a Career in Green Construction: Tips and Insights
Top 5 Benefits of Workplace Sustainability
The Role of Smart Technology in Managing EV Charging Stations
4 USA Vacation Destinations for an Eco-Friendly Trip
6 Wastewater Management Tips to Reduce Water Pollution
Why Internet Faxing Is A Sustainable Business Move
5 Ways Eco-Friendly Employers Can Boost Efficiency
What to Look for When Choosing an Eco-Friendly Locksmith
Flexible Return Policies Can Make Retail More Sustainable
Using Green Patents to Drive Sustainability & Eco-Friendly Designs
- Environment3 months ago
6 Home Improvements You Can Make to Help the Environment
- Environment10 months ago
4 Countries That Have Banned Single-Use Plastic
- Features9 months ago
5 Huge Support Tips for Eco-friendly eCommerce Brands
- Environment7 months ago
How to Ensure Your Home’s Eco-Friendly During Construction?