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Public Interventions and Private Climate Finance Flows: Empirical Evidence from Renewable Energy Financing

Author

Listed:
  • Ivan Haščič

    (OECD)

  • Miguel Cárdenas Rodríguez

    (OECD)

  • Raphaël Jachnik

    (OECD)

  • Jérôme Silva

    (OECD)

  • Nick Johnstone

    (OECD)

Abstract

This study uses a unique dataset of investment flows to analyse the role of two categories of public interventions (finance and policies) in mobilising flows of private climate finance worldwide and in the more specific context of flows to and in developing countries. The objectives are threefold. First, the paper presents ‘observed’ ratios of total private to public finance in selected climate-related sectors. Second, it seeks to understand the determinants of private climate finance flows by analysing the role of key public finance (bilateral, domestic and multilateral) and public policy instruments (feed-in tariffs, renewable energy quotas, the Clean Development Mechanism), while taking into account a number of market and country conditions. For reasons of data availability, the focus of this econometric analysis is on a subset of six renewable energy sectors (wind, solar, biomass, small hydro, marine and geothermal). Finally, the paper assesses the likely mobilisation impact of past public interventions in these six sectors, and draws a comparison with approaches that ignore the role of policy as well as country and market conditions. Results suggest that both public finance and public policies have played an important role in private finance mobilisation globally. In the context of finance to and in developing countries, the results highlight the currently untapped potential of domestic public policies to increase mobilisation. The methodology proposed in this report is an initial attempt to estimate private climate finance mobilisation empirically. It should be seen as a first step towards developing more comprehensive methodologies for analysing and estimating private finance mobilisation in the global climate policy context.

Suggested Citation

  • Ivan Haščič & Miguel Cárdenas Rodríguez & Raphaël Jachnik & Jérôme Silva & Nick Johnstone, 2015. "Public Interventions and Private Climate Finance Flows: Empirical Evidence from Renewable Energy Financing," OECD Environment Working Papers 80, OECD Publishing.
  • Handle: RePEc:oec:envaaa:80-en
    DOI: 10.1787/5js6b1r9lfd4-en
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    Citations

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    Cited by:

    1. Juan Benavides & Ximena Cadena & Martha E. Delgado-Rojas & Helena García & María C. García, 2022. "Hoja de ruta que conecte cada una de las acciones y objetivos de la NDC con fuentes de financiación públicas y privadas; incluyendo para cada acción, barreras, oportunidades y recomendaciones," Informes de Investigación 20332, Fedesarrollo.
    2. Wen-Hsiang Chiu & Wen-Cheng Lin & Chun-Nan Chen & Nien-Ping Chen, 2021. "Using an Analytical Hierarchy Process to Analyze the Development of the Green Energy Industry," Energies, MDPI, vol. 14(15), pages 1-15, July.
    3. Ekaterina Azarova & Hannah Jun, 2021. "Investigating Determinants of International Clean Energy Investments in Emerging Markets," Sustainability, MDPI, vol. 13(21), pages 1-15, October.
    4. Ciccarelli, Matteo & Marotta, Fulvia, 2021. "Demand or supply? An empirical exploration of the effects of climate change on the macroeconomy," Working Paper Series 2608, European Central Bank.
    5. Matteo Ciccarelli & Fulvia Marotta, 2021. "Demand or Supply? An empirical exploration of the effects of climate change on the macroeconomy," Working Papers 933, Queen Mary University of London, School of Economics and Finance.
    6. Mazzucato, Mariana & Semieniuk, Gregor, 2018. "Financing renewable energy: Who is financing what and why it matters," Technological Forecasting and Social Change, Elsevier, vol. 127(C), pages 8-22.
    7. Geraldine Ang & Dirk Röttgers & Pralhad Burli, 2017. "The empirics of enabling investment and innovation in renewable energy," OECD Environment Working Papers 123, OECD Publishing.
    8. Carter, Patrick & Van de Sijpe, Nicolas & Calel, Raphael, 2021. "The elusive quest for additionality," World Development, Elsevier, vol. 141(C).
    9. Christian Haas & Karol Kempa, 2023. "Low-Carbon Investment and Credit Rationing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 86(1), pages 109-145, October.
    10. Mark Edem Kunawotor & Godfred Alufar Bokpin & Patrick O. Asuming & Kofi A. Amoateng, 2022. "The implications of climate change and extreme weather events for fiscal balance and fiscal policy in Africa," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 24(2), pages 470-492, December.
    11. Corrocher, Nicoletta & Cappa, Elisabetta, 2020. "The Role of public interventions in inducing private climate finance: An empirical analysis of the solar energy sector," Energy Policy, Elsevier, vol. 147(C).

    More about this item

    Keywords

    climate change; estimation; investment; leverage; mobilisation; private finance; public interventions; renewable energy;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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