T20 Indonesia 2022 Policy Brief: International Financing Framework To Bridge The Climate Financing Gap Between Developed And Developing Countries

Alvin Ulido Lumbanraja and Teuku Riefky
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Alvin Ulido Lumbanraja: Northwestern University – Kellogg School of Management

No 202203, T20 Indonesia 2022 Policy Brief from LPEM T20 Indonesia

Abstract: To tackle climate change, countries need to channel more capital to green projects. Additionally, typical green projects tend to have a lower return and/or higher fixed costs relative to brown investment projects. This, along with the higher cost of capital and limited fiscal spaces, means that the state budget of developing countries will not be enough to fulfil the financing needs of climate-related projects. Furthermore, shallow domestic financial markets also limit the available domestic funds for green projects in developing countries. This policy brief proposes an actionable framework to promote the flow of private capital from developed countries into green projects in developing countries.

Keywords: international; finance; —; t20; —; financing; gap; —; private; capital; —; developing; countries; —; developed; countries (search for similar items in EconPapers)
Date: 2022-03, Revised 2022-03
New Economics Papers: this item is included in nep-ene, nep-env, nep-ppm and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:lpe:t20ina:202203

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