Which Types of Public Sector Financing Are Needed? Financing a Clean Energy Growth Economy

This is the seventh briefing in a series on how the transition to a clean energy growth economy with lower GHG emissions will be financed.

Document Highlights

As discussed in Briefing 6, financing public sector clean growth and emission reduction requires two possible policy approaches. Briefing 6 focused on the first approach—creating capacity in the overall financial system to finance clean growth and emissions reduction economic activity. The second option is for government and its entities to decide to become the dominant, or even sole source of financing in specific market segments. There are likely to be some areas where governments should indeed be the source of funding. This seventh briefing explores six potential government financing areas: budgetary funding; tax and fiscal incentives; green bonds; investment in clean growth and emission reduction start-up firms and projects; investment in clean growth and emission reduction demonstration projects; and international trade, investment, and development. The briefing concludes by sharing a number of approaches, in terms of building capacity, which could be considered.