Leveraging low-carbon private investment: Capital Markets Climate Initiative. Tamsin Ballard UK Department of Energy & Climate Change

Transcription

1 Leveraging low-carbon private investment: Capital Markets Climate Initiative Tamsin Ballard UK Department of Energy & Climate Change

2 Context Public sector interest in private climate finance driven by: Need to raise $100bn p.a. by 2020 (UNFCCC LCA text) Successful economic transition to low-carbon growth needs private investment UNFCCC (2008): 85% of finance or investment to support climate change action will need to come from private sector IEA (2009): $197bn additional capital investments for developing/emerging economies Scope for significant supply of private investment AGF (2010): Approaching $500bn of potential private investment HSBC (2011): India s climate economy $135bn by

3 Mobilising private climate finance: UK focus Advisory Group on Climate Change Finance (AGF) International climate finance architecture: Member of Green Climate Fund (GCF) Transitional Committee see key role for GCF in mobilising private finance Public climate finance: UK International Climate Fund objective includes mobilising private finance e.g. CP3 funding Investment grade policies: Capital Markets Climate Initiative (CMCI) assisting policymakers in understanding why, what and how public sector action can leverage private capital 3

4 Advisory Group on Climate Change Financing: Private finance findings Wise use of public funds combined with private funds to generate transformational investments Scale up efforts of MDBs Need to overcome range of existing barriers Country/project specific Better use of existing public interventions Packaging/scaling up/ re-focusing Hundreds of billions of dollars of private flows needed $ bn international private capital flows could be mobilised 4

5 CMCI: Objectives Practical focus: Support policymakers in understanding role and application of investment grade policies, regulations, public finance Strengthen case for action through power of example Demonstrate facilitative role of well developed capital markets Expected outputs: Set of principles and toolkit for policymakers Proof points to demonstrate impact of public action and commercial viability Advisory inputs (GCF, ICF) 5

6 CMCI: Proposed approach Core elements: Research and analysis, aggregating experiences/lessons Public-private dialogue and consultation Real application/implementation Delivery: WG1: develop set of principles/toolkit for policymakers Common standards and sector specific recommendations Process/means for implementation WG 2: provide support to governments wishing to attract private investors to their low carbon policies/programmes/projects Bottom-up (programmes/projects) and top-down (policies) approach Help test / refine principles and tools and create proof points 6

7 CMCI: Proposed approach Working Group 1 Principles and tools for policy makers Expected outputs: Set of principles and toolkit for policymakers Aggregating lessons and experiences Prove and improve, proof points Demonstration of role of pubic and commercial viability Working Group 2 Testing on specific & live in-country Policies/Programmes/Projects Advisory inputs (e.g. GCF, ICF) 7

8 CMCI: Membership Current UK government (Ministerial leadership) Financial sector representatives (banks, institutional investors, insurance companies, stock exchanges, credit rating agency) Development finance institutions Financial/private sector experts Other key stakeholders e.g. Other interested governments (developed/developing) Developing country banks and pension funds Project developers Pension fund consultants 8

9 Public finance can jump-start the motor, but private investment in low-carbon infrastructure and solutions will need to keep it running (OECD, 2011) 9