Policy Lever: Harnessing Public Balance Sheets
ExamplesSteps that can be taken to develop new green investment incentives, or to align existing incentives to sustainable development include:
- Target fiscal support: Establishing and optimising fiscal incentives to mobilize private capital for green investment.
- Review fiscal incentives: Reviewing the alignment of existing fiscal incentives for savings, investment, lending and insurance with sustainability.
- Sustainability mandates of public financial institutions: Strengthening sustainability as part of the mission and operation of development finance institutions and sovereign wealth funds.
- Establish new green institutions: Launching new green investment banks and funds.
- Blended finance instruments: Developing and using financial instruments designed to share risks and overcome barriers to private investment (such as through risk underwriting & results based financing).
- Central banks refinancing operations: Extending refinancing operations to include green assets.
- Central bank asset purchase programmes: Incorporating sustainability factors into asset purchase programmes.
- Public procurement criteria: Introducing sustainable development performance into procurement of financial services by the public sector.
ImpactsThese measures are widely adopted and can be effective, but the scale of new funding available is limited. Nevertheless the financial system is already the recipient of, and conduit for, significant public financial support, which has the potential to be aligned to sustainable development.
The US financial system is undoubtedly among the largest, most innovative and most sophisticated in the world. It is also clear that this is both a benefit and an impediment to non-governmental investment in sustainability and inclusiveness. To date, the actual investment in infrastructure and sustainability does not meet current needs, especially those related to maintaining
China is supporting investment in developing countries through the BRICS Development Bank, the Asian Infrastructure Invesment Bank and the Silk Road Fund. It aims to draw upon the experiences and rules of other multilateral development agencies to ensure that this financing encourages environmentally and socially responsible investment. The paper offers some recommendations on how the BRICS Development Bank, the AIIB and the
Green bonds provide a potential source of long-term funding for green loans which reduces the risk of maturity mismatch. This paper recommends that China should commence the pilot issuance of green bonds at the earliest possible date to support the green lending business of banks. Specific recommendations are: Create a clear standard to define the scope of investment
With the initial progress of China’s green finance market, some lessons are emerging that are useful both for the further development of the green finance system and for other emerging market countries embarking on green finance development. Strategic political commitment has been the key driver for China’s development of green finance, but translating this into
This is the 4th Update Report of the UNEP Inquiry, it is focused on the challenge of financing the low-carbon transition. Many approaches and instruments will be needed to deliver the financing needed. Public finance, funded by tax revenues and international transfers, will provide part of the solution. However such finance will be inadequate. Private
This report outlines key concerns and needs of developing countries in relation to green finance, particularly focusing on developing countries that are not members of the G20. It also highlights emerging innovations, drawing in particular from engagement with practitioners and regulators from Bangladesh, Colombia, Egypt, Honduras, Jordan, Kenya, Mauritius, Mongolia, Morocco, Nigeria, the Philippines, Thailand
This guide argues that with the right support in place USD 1 trillion of green bonds could be issued a year by 2020 – providing a significant contribution to closing the investment gap for climate-friendly infrastructure in both developed economies and emerging markets. It argues for several sets of policy actions to support and enable the green
Download the full report: [AR] [CH] [EN] [ES] [FR] [PT] [RU] Download the policy summary: [AR] [CH] [EN] [ES] [FR] [PT] [RU] This first edition of “The Financial System We Need” argues that there is now a historic opportunity to shape a financial system that can more effectively finance the development of an inclusive, green economy. This opportunity is based on a growing trend
The Green Finance Taskforce was convened in 2014 by the People’s Bank of China and the UNEP Inquiry. The Taskforce brought together leading Chinese experts on financial markets, policy and regulation from government, academia and from the private sector together with international experts and practitioners. One of the inputs to the deliberations of the Taskforce
In recent years, financial market policy-makers and regulators in China have shown leadership in advancing their roles in creating a green financial system. However, the impacts to date have been constrained by countervailing forces. In particular, the performance criteria on which local government officials are assessed still prioritizes economic growth over environmental compliance. The positive
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