Catalysing low-carbon growth in developing economies
The successful mobilization of private investment for greenhouse gas abatement and adaptation to climate change especially in developing countries will be one of the critical conditions for the success of any global climate change strategy. In the recent past carbon markets have already played an important role in doing so, but, given their limited breadth and depth, they are unlikely to channel private finance at the scale needed in the coming years. Public Finance Mechanisms (PFMs) have the potential to leverage large quantities of private investment through smart public investment at scales beyond the carbon markets. This report provides an evidence base of what design features have made such mechanisms work successfully in the past. It further suggests how, with which design elements and through which institutional frameworks and mechanisms PFMs at international level could best be deployed to leverage private investment in a scale needed for the creation of a low-carbon economy.