POSTED: April 4, 2018
Finance | Politics & Enterprise

Enabling investment for the transition to a low carbon economy: government policy to finance early stage green innovation

New paper by Robyn Owen, Geraldine Brennan and Fergus Lyon
Current Opinion in Environmental Sustainability, Vol 31
April 2018

Escalators visualising uplifting mechanism for growth
CC-BY-NC-ND 2.0 :: Cirox / Flickr

Rapid transformation to meet the Paris 1.5°C climate target requires greater attention to be given to the role of innovative low carbon early stage businesses and the public sector’s role in addressing finance gaps for longer horizon investment requirements. As entrepreneurs require different forms of finance as their businesses grow and move up the ‘finance escalator’, we explore the role of public sector support for grant, equity, debt and new forms of crowd funding finance in higher and lower income countries. These funds can enable individual sustainability focussed businesses to access finance and encourage finance into new areas through having a demonstration effect.

We conclude that a finance ecosystem approach is required that ensures complementary forms of finance for low carbon investment are connected at local, national and international scales, alongside support to build entrepreneurial skills and investment readiness. There is also a need for better evidence of the role of public sector support and where there is greatest impact on climate change.

The findings are further summaried in a blog post by Fergus Lyon. The full paper can be accessed on the Science Direct website.

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