Introduction to the Special Section: Private Investment and Public Funds for Climate Finance
| Author | Andreas Klasen |
| Published date | 01 September 2015 |
| Date | 01 September 2015 |
| DOI | http://doi.org/10.1111/1758-5899.12260 |
Introduction to the Special Section: Private
Investment and Public Funds for Climate
Finance
Andreas Klasen
Offenburg University
Climate change and global warming have become a key
topic in the global policy debate during the last dec-
ades. An increase in the earth’s temperature resulting
from greenhouse gas emissions is one of the main chal-
lenges for the 21st century. Air and water pollution,
increasing solid waste, pressure on agricultural land and
a loss of biodiversity are further threats, in particular for
emerging and developing economies. There are numer-
ous initiatives to meet these challenges, for example to
lower climate pollution from natural gas, to foster a
clean energy economy or to support the sustainable use
of land. And in addition to personal, ethical or even the-
ological questions how to deal with the integrity of cre-
ation, it is an enormous task to combine economic
growth and a considerate exploitation of land. Being
exposed to significant threats, companies and govern-
ments have to learn how to use available resources
responsibly.
A need for a comprehensive policy framework
Boosting sustainable behaviour in growing economies is
often related to national and often singular actions. How-
ever, just as economic policy-making needs to be
embedded in a broader analytical framework (Meyer and
Klasen, 2013), environmental initiatives work best when
included in a comprehensive policy framework. Crucial
questions, which need answering, are how to implement
renewable energy systems, how to integrate biodiversity
into business activities and a country’s economic growth
path, and how to unlock means for climate finance. The
latter refers to local, national or transnational financing,
which may be drawn from public, private or alternative
sources for measures or infrastructure to mitigate and
adapt to the effects of climate change. The Copenhagen
Summit in 2009 gave climate finance a strong push rais-
ing the topic to the highest political level (Pittel and
R€
ubbelke, 2013). Industrialised countries committed to
spend additional 100 billion US dollars by 2020. And a
next major step is expected to take place in Paris in
December 2015, when for the first time in over 20 years
of UN negotiations, a binding and universal agreement
on climate change can be achieved.
Although environmental challenges are universal, it is
obvious that developing economies are most vulnerable
to climate change. And as often in the field of develop-
ment, there is a considerable funding gap. So the key
challenge is how to mobilise sufficient public and private
funds for mitigation and adaption in emerging and
developing countries. As mentioned by Skovgaard (2012,
p. 2), the involvement of ministries of finance in climate
change negotiations is highly important, ‘as they espouse
a paradigm based on economic rationality and budget
concerns’. However, private long-term finance is also fun-
damental to undertake mitigation and adaptation activi-
ties (Buchner et al., 2014). Filling the existing gap with a
combination of both public and private financial
resources through risk mitigation and risk enhancement
solutions is therefore a key to success.
Combining private investment and government
support
This Special Section on climate finance presents several
approaches to combine private investment and govern-
ment support for climate finance. It deals with
well-known strategies such as carbon pricing to drive
investment into cleaner options. It shows how to mobi-
lise private investment for climate friendly and innovative
products with innovative financing instruments like the
new Swiss Technology Fund. The section also sheds light
on how traditional foreign trade support programmes
such as export credit agencies (ECAs) can play a crucial
role for climate finance. And, last but not least, it has a
look at the United Nation’s Energy for All (SE4All) initia-
tive showing that ECAs and multilateral partners can
break new ground to enable renewable energy projects
in sub-Saharan Africa.
Successful carbon pricing policies drive investment
and are part of good fiscal and economic policies. Stabil-
ising climate change entails bringing net emissions of
carbon dioxide down to zero, and getting prices right
Global Policy (2015) 6:3 doi: 10.1111/1758-5899.12260 ©2015 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 6 . Issue 3 . September 2015 305
Special Section Article
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