Financing Green Growth in a Resource-constrained World

The scale and frequency of weather shocks, combined with long-term economic forecasts of climate change effects and fossil fuel costs, are having a political as well as an economic impact. Many developing country governments are changing their approach to infrastructure and industrial planning, choosing to design more sustainable, resilient pathways to economic growth. They are developing comprehensive national investment programmes in clean energy, energy efficiency, water management, climate-resilient agriculture, smart grids and low-carbon transport systems. This strategic shift has been termed “greening the economy” or making a “green growth” transition. Currently, significant private investment is not being attracted to these plans due to a range of perceived risks and the relative novelty of the market. What public-private partnerships can support developing countries to create large-scale, investment-grade blueprints for their green growth strategies? What new financing mechanisms can use targeted public funds to address key risks and leverage a step change in private capital flow into green infrastructure projects?