1 / 36

Who and How to Finance the post-2015 Sustainable Development Agenda?

Who and How to Finance the post-2015 Sustainable Development Agenda?. Yannick Glemarec Copenhagen, 28 February 2014. Part I. The mandatory Universality of Sustainable Development Goals.

koto
Download Presentation

Who and How to Finance the post-2015 Sustainable Development Agenda?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Who and How to Finance the post-2015 Sustainable Development Agenda? YannickGlemarec Copenhagen, 28 February 2014

  2. Part I The mandatory Universality of Sustainable Development Goals

  3. Financing Needs for Environment and Climate far exceed current levels of Official Development and Climate Finance UNDP: Human Development Report 2011/12

  4. Costs Versus Investment Source: Global GHG Abatement Cost Curve v2, McKinsey (2009)

  5. Global investment in clean energy Source: Bloomberg New Energy Finance (2013)

  6. The capital intensity of renewable energy Source: UNDP, DeriskingRenewable Energy Investment (2013). See Annex A of the report for full assumptions.

  7. Renewable energy vs fossil-fuel energy • Developed vs. developing countries Source: UNDP, DeriskingRenewable Energy Investment (2013). See Annex A of the report for full assumptions. All assumptions (technology costs, capital structure etc.) except for financing costs are kept constant between the developed and developing country. Operating costs appear as a lower contribution to LCOE in developing countries due to discounting effects from higher financing costs.

  8. Mandatory Universality

  9. Creating Attractive Risk/Reward Profile for Green Investment

  10. Challenges to Financing the Post-2015 ERA • Reforming Financial Markets. • Transforming sector markets efficiently to align corporate and household finance with global and national sustainable development goals • Increasing sources of public finance to create enabling policy environments and catalyze private finance • Enhancing the capacity of developing countries to access, combine and sequence development finance to support market transformation

  11. Part II Market Transformation for Sustainable Development

  12. Market Transformation to Scale Up Green Investment Source: YannickGlemarec, 2011

  13. Selecting a public instrument mix • to catalyse renewable energy investment Source: UNDP, DeriskingRenewable Energy Investment (2013).

  14. Illustrative modelling case-study for • South Africa (8.4 GW, wind): risk waterfalls Source: UNDP, DeriskingRenewable Energy Investment (2013). Data obtained from interviews with wind investors and developers. See Annex A of the report for full assumptions. The post-derisking cost of debt and equity show the average impacts over a 20 year modelling period, assuming linear timing effects.

  15. Illustrative modelling results for South Africa (8.4 GW, wind) Source: UNDP, Derisking Renewable Energy Investment (2013). See Chapter 3 and Annex A of the report for full assumptions.

  16. Financing On-Grid Wind Power Market Transformation Project Financing (Illustrative) Public Instrument Package (Illustrative – on-grid) Select Cornerstone Instrument • Examples: Auctioning Feed-in tariff Direct Incentives Policy Derisking Financial Derisking • Examples: • Examples: • Examples: Dev. Bank • Quality standards • Loan guarantees • Capital subsidy Capital Markets Project Company • Credit • enhancement • O&M skills • Public loans • FiT premium • Public awareness • issues Corporate bonds electricity rates/ PBP Climate Bond Financing (Illustrative) Soft loans Public grants Source: UNDP, DeriskingRenewable Energy Investment (2013), adapted. Source: UNDP

  17. Part III New Sources of Finance for Sustainable Development

  18. Contribution to 5-year Cumulative Global GDP (constant 2005 US$)

  19. North-South Flows 1990-2010 Source: Jenks and Jones, 2013

  20. Finance Available to Developing Countries EU, 2013

  21. Domestic Revenue Mobilization • Broadening tax bases • Fiscal reforms: from fossil fuel subsidies to polluter fines and reduction of loopholes • Curbing Illegal flows and aggressive transfer pricing • Tapping private wealth • Commodities and Sovereign Wealth Funds • Innovative sources of finance: diaspora bonds and remittance-backed bonds; resources-for-infrastructure;

  22. Subsidies and Social Spending, 2010

  23. Climate Finance vs. fossil fuel subsidies

  24. Sovereign Wealth Funds

  25. Global Networks and Alliances • The “Summary of Commitments” of the UN SG Summit on maternal and child health documents more than $ 40 billion of promises over a five year period from: • 35 countries in attendance; • 54 civil society organizations (the Gate Foundation pledged $ 1.5 billion); • Private companies (Merck committed $ 840 million for HIV prevention and treatment); • Multilateral agencies (WHO, GAVI, WB, etc.) • Similar fluid and dynamic coalitions are coalescing around all major collactive challenges.

  26. ODA in the “Post-2015” Era • The expanding set of global objectives: Peace, Poverty, Equality and Environmental Sustainability; • The New faces of poverty and equity; • The fiscal capacity of low-income countries, fragile states and some small island states remain very limited; • Exposure and countries’ capacities to cope with shocks vary; • Conflicts and negative development; • Common and differentiated responsibilities for global commons (compensation, trade or ODA?); • A number of innovative financing instruments required a global cooperation; • Regional and thematic unbalance of private capital flows; • Markets are public-private partnerships, not platonic entities from high on; • The Complexity of Sustainable Development Finance.

  27. Part IV Green Finance Preparedness

  28. Climate Change Finance: Sources, Agents and Channels Source: Adapted by Yannick Glemarec from Atteridge and others (2009)

  29. Accessing the Adaptation Fund • Direct access is about developing institutions that have capacities for financial management, integrity, transparency and self-investigatory powers; • UNDP encourages countries to develop their institutions to qualify for direct access.

  30. UNDP’s Approach to assist countries to plan for, access, deliver and report on finance for low emission growth Supporting national systems through this process for climate finance helps countries to use finance effectively Building capacities for planning, accessing, delivering and MRV ensures climate finance is available and effective in all countries

  31. Formulation of Low Emission Climate Resilient Strategy

  32. Financing Transformation Approaches International Public Finance (Global Vertical Funds) International Public/ Private Finance (Carbon Markets) Policy & Financial De-risking Performance-based Payments Scaled-up Mitigation Actions Leveraged Private Financial Flows = + X Tax Credits Carbon Offsets Domestic Public Finance (National Climate Funds) Public/Private Finance (Tariff premium)

  33. National Climate Funds to Support Transformative Changes PROGRAMME-RELATED FRAMEWORK Mali National Policy on Climate Change STRATEGIC PLAN 2014 (RESULT FRAMEWORK) Mali National Climate Fund

  34. UNDP’s support for Green Finance Preparedness in China

  35. Many tools available Online

More Related