A new United Nations-backed report released today details how to ensure that developing countries are part of the transition to a ‘green’ economy.
With some $500 billion a year expected to be needed to help poorer nations adapt to climate change and at the same time power low-carbon growth, the funds must come from the private sector but that requires creative public policies, according to the study issued by the UN Environment Programme (UNEP) and a global partnership of investors and insurance companies.
“Combating climate change represents an important opportunity to move economies onto a low carbon, resource efficient, Green Economy path,” said Achim Steiner, UNEP’s Executive Director. “If this is to succeed, developing countries should and must be part of that transformation.”
The new report, he said, shows how current barriers to shifting to a low carbon economy can be “leap-frogged,” paving the way for a new North-South relationship.
Issued today in Cape Town, South Africa, it calls for expanding insurance against country risk and for funds to hedge currency risk, among other recommendations.
A recent study commissioned by the UN Framework Convention on Climate Change (UNFCCC) found that the private sector will have to supply up to 90 per cent of the funds needed to meet the climate challenge, but that at present it is unwilling to undertake large investments in developing countries due to the limited returns on low-carbon investments.
The report issued today – entitled “Catalysing Low Carbon Growth in Developing Economies: public finance mechanisms to scale up private sector investment in climate solutions” – urges an effective distribution of roles between the public and private sectors.
With appropriate public finance mechanisms, the public sector can help manage risks that the private sector cannot control, it noted.