Financing low-carbon infrastructure

'Financing low-carbon infrastructure,’ asserts that current investment in low-carbon infrastructure is well below what is needed to meet climate change targets in most major markets.

In the UK, for example, the Committee on Climate Change estimates that investment in greening the energy sector needs to double from an average of £10bn a year to £20bn annually, if it is to reach net zero emissions by 2050. Globally, an additional $1.1trn is needed annually between now and 2040 to meet the International Energy Agency’s green energy target.

Most of the money required for this green investment will need to come from the private sector. However, despite growing investor appetite and supportive macroeconomic conditions, green investment levels remain below potential and insufficient to meet climate change targets. Significant barriers exist, from structural issues and market failures, to misaligned incentives, which are holding back investment. The challenges are varied but include political, regulatory, financial, data and technological hurdles to overcome.

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