Exploring options to measure the climate consistency of real economy investments: The transport sector in Latvia
Alexander Dobrinevski and
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Alexander Dobrinevski: OECD
Raphaël Jachnik: OECD
No 163, OECD Environment Working Papers from OECD Publishing
Mitigating climate change requires aligning real economy investments with climate objectives. This pilot study measures the climate consistency of investments in transport infrastructure and vehicles in Latvia between 2008 and 2018, estimated at EUR 1.5 billion per year on average. To do so, three complementary mitigation-related reference points are used. Applying the criteria defined by the European Union Taxonomy for Sustainable Activities results in 4.2% of investments assessed as making a substantial contribution to climate change mitigation. Comparing actual greenhouse gas trajectories for each transport mode to a 2°C scenario from the International Energy Agency’s for the European Union and to projections from Latvia’s 5th National Communication to the UNFCCC, indicates 32% climate-consistent and up to 9% climate-inconsistent investments. The majority of investments volumes could at this stage not be characterised due to limitations relating to the granularity or coverage of the reference points. Comparing current trends to 2030 and 2050 decarbonisation targets nevertheless highlights future investment and financing challenges, especially for road transport. The methodology piloted in this study can be replicated and scaled up across countries and sectors, using different or complementary reference points specifically aligned to the temperature goal of the Paris Agreement.
Keywords: capital expenditure; climate change; emissions; energy efficiency; finance; investment; Latvia; low-greenhouse gas development; measurement; scenarios; taxonomy; tracking; transport (search for similar items in EconPapers)
JEL-codes: Q54 Q56 H54 E01 E22 G31 G32 L91 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cis, nep-ene, nep-env, nep-mac and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:oec:envaaa:163-en
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