Global Annual Climate Finance Reaches USD 364 Billion, Falls Short Of Investment Needed To Limit Global Warming To Two Degrees Celsius
DOHA, Qatar, Dec. 3, 2012 /PRNewswire-USNewswire/ -- A new report released today, The Global Landscape of Climate Finance 2012, produced by Climate Policy Initiative (CPI), shows that global annual investment to curb climate change reached approximately USD 364 billion in 2010/2011.
This amount, while significant, falls short of most estimates of investment needed to limit global warming to two degrees Celsius. According to the International Energy Agency, approximately USD 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.
Building a complete picture of climate finance flows is critical to understanding how much, and what type of support, is available to curb and address climate change. The Global Landscape of Climate Finance 2012 provides the most comprehensive global climate finance mapping effort to date.
According to the report, the private sector was the main source of global climate finance, contributing between USD 217 and 243 billion, mostly from corporations and renewable energy project developers. Public sector investment totaled between USD 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 USD 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."
One place to look for examples of how to encourage private investment may be in Germany. According to a related CPI report, The German Climate Finance Landscape, which will be released later this month, the private sector provided more than 95% of total climate finance in Germany, about half of which was supported by concessionary loans from public development banks.
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.
For more information, and to download the report, visit www.ClimatePolicyInitiative.org.
Climate Policy Initiative (CPI) is a global policy effectiveness analysis and advisory organization. Its mission is to assess, diagnose, and support nations' efforts to achieve low-carbon growth. An independent, not-for-profit organization with long-term support from George Soros, CPI's headquarters is in San Francisco and regional offices are in Berlin, Beijing, Hyderabad, Jakarta, Rio de Janeiro, and Venice.
SOURCE Climate Policy Initiative