How public development banks can boost private climate investment
Money matters to climate. One of the objectives of the UN Climate Change Conference in Paris is to generate financing for projects and initiatives that can make a difference to global warming and help people adapt to the changes warming will bring. As a group, multilateral development banks have become the main providers of climate finance.
Their contribution is key in the fight to control the effects of climate change. As the world’s biggest climate action lender, the EIB is well aware of its responsibility to find new avenues for climate action. In advance of the Paris conference, we committed to increase the percentage of climate action loans we’re making in vulnerable countries. We’re also committed to finding ways to reduce the risk of climate action investment so that private investors will warm up to the idea.
That’s why in October our bank committed to increase lending for climate action projects to 35 per cent of loans in the most vulnerable countries by 2020. This year is set to be the hottest ever, according to the US agency that tracks worldwide temperatures. We want to ensure that the climate isn’t the only thing that changes. So must we, because change is an opportunity for growth. Just as the temperature increases all around the world, so growth must increase worldwide. Its effects will be most dramatic in the poorest countries.
Of course, climate action works anywhere in the world. The EIB ensures that at least 25 per cent of all its annual loans, including those inside the EU, go to climate action, and this helps deal with climate change everywhere, not just in the countries where the money is spent. But poorer countries generally can’t afford to spur climate finance investment themselves. They’re also more catastrophically affected by climate change.
Read the full article at LSE Europe blog: http://bit.ly/1lqbFHf