Maximizing the Impact of Climate Finance: Funding Projects or Pilot Projects?

Matthew Kotchen

No 23023, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper contributes to the understanding of how to maximize the impact of publicly provided climate finance to leverage the private sector. Agencies seeking to promote private investment in support of climate change mitigation and adaptation may have a choice between subsidizing projects or pilot projects. Pilots are either scaled down versions of full projects or an experimental phase that generates better information about whether a full project is likely to succeed or fail. Drawing on insights about the value of experimentation for entrepreneurship and raising private capital, the theoretical model developed herein provides guidance about when subsidizing projects or pilots is more efficient.

JEL-codes: G18 H2 Q4 Q5 (search for similar items in EconPapers)
Date: 2017-01
New Economics Papers: this item is included in nep-ene, nep-env and nep-ppm
Note: EEE PE PR
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Citations: View citations in EconPapers (1)

Published as Matthew J. Kotchen & Christopher Costello, 2018. "Maximizing the impact of climate finance: Funding projects or pilot projects?," Journal of Environmental Economics and Management, vol 92, pages 270-281.

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Journal Article: Maximizing the impact of climate finance: Funding projects or pilot projects? (2018)
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