Global annual climate spend hits $364bn
Doha, December 4, 2012
Global annual investment to curb climate change reached approximately $364 billion in 2010/2011, according to a new report.
This amount, while significant, falls short of most estimates of investment needed to limit global warming to two degrees Celsius, added The Global Landscape of Climate Finance 2012, produced by Climate Policy Initiative (CPI).
According to the International Energy Agency, approximately $1 trillion each year is needed in incremental investment in the energy sector alone to promote low emissions growth. Much more will be needed to achieve climate resilient development globally.
According to the report, the private sector was the main source of global climate finance, contributing between $217 and 243 billion, mostly from corporations and renewable energy project developers. Public sector investment totaled between $16 and 23 billion globally.
Most public sector investment acted as a catalyst for private investment through incentive mechanisms and subsidies that helped to lower investment costs.
Public and private intermediary organizations such as national development banks and commercial banks also played an important role, raising and channeling between $110 and 120 billion, and often providing support for projects that would otherwise not be viable.
"The fact that the public policies and incentives are starting to unlock private investment is good news for policymakers dealing with limited budgets," said Barbara Buchner, Director, CPI Europe, and one of the principal authors of the report.
"However, the level of available investment still falls far short of the total amount needed to limit global warming to two degrees Celsius. We must focus on the policies that are working and act quickly to scale those up around the world."
The Global Landscape report also provided insights on how and where climate finance was used. Emerging economies were key recipients of climate finance, but were also important sources.
Roughly one third of global climate mitigation investments were located in China, Brazil, and India, a significant share of which was raised domestically and invested in pursuit of national development mandates. – TradeArabia News Service