Financing the Energy Transition in Times of Financial Market Instability
AbstractOne of the most pressing public priorities in Germany at present is how to organize the energy transition. However, the cost of stabilizing the financial sector as well as the fiscal pact and the debt brake mean that the government has limited financial resources. Consequently, the availability of private capital, whether in the form of equity or debt, is becoming a decisive factor in the success of the German energy transition. Recently, there have been increasing indications that banks are very reluctant to provide loans and are focusing on the potential risks of financing the switch to renewable energy. At the same time, however, the financial sector is also wrestling with political decision-makers about the capital requirements of the loans concerned. Yet, reducing the capital base in the banking sector is out of the question. Instead, the government should also call for appropriate involvement of the major banks in financing the energy transition in return for implicit guarantees for those banks, just as financial aid from the government was linked to loans being granted to SMEs in 2008. At the same time, the risks have to be spread more widely. Know-how and financial strength of private equity funds may be of help here.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by DIW Berlin, German Institute for Economic Research in its journal DIW Economic Bulletin.
Volume (Year): 2 (2012)
Issue (Month): 9 ()
sustainable financial architecture; energy transition in Germany; investment in new infrastructure;
Find related papers by JEL classification:
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
- Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statistics
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.