Focus area

Private/Public Funding

A green and just transition requires the mobilisation of additional capital from both public and private sources.

Financial and non-financial support mechanisms are needed, as is credible information on economic activities’ contribution to the fight against climate change.

This is crucial to shift capital flows from high-emitting to low-carbon and renewable projects. 

In short:

  • Targeted public financial and non-financial support mechanisms are essential to finance the green and just transition. 

  • Credible and transparent information on economic activities’ contribution to climate mitigation is a prerequisite for mobilising additional private capital.

  • Capital flows must be shifted from high-emitting to low-carbon and renewable economic activities. 

The failure of markets to deliver in the fight against climate change has made it clear that public intervention is necessary. Such an intervention must take the form of financial and non-financial support mechanisms, based on clear criteria and information about economic activities’ contribution to climate mitigation.

Transparent and credible information about different economic activities’ contributions to the fight against climate change is critical to address investment risks and uncertainties that prevent further mobilisation of private capital.

However, mobilising additional capital alone is not enough. It is also essential to shift capital flows from high-emitting economic activities to low-carbon and renewable initiatives, technologies, and projects to achieve climate targets. 

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Lead Markets 101

The fundamental step of creating green lead markets is to generate a comprehensive CO2-footprint of a good or service in order to identify what is ‘green’ and which products should be pulled to the market. To ensure alignment with carbon neutrality goals, such a system needs to account for the whole lifecycle carbon of a product and include both the ‘operational carbon’, so the CO2 emitted during the use of a product, and the ‘embodied carbon’. The latter refers to the CO2 from input materials and processes going into a product, as well as the emissions resulting from products’ refurbishment and end-of-life treatment. 

The people involved

Lina Strandvåg Nagell

Senior Manager Projects & EU Policy

Hanna Biro

Policy Advisor

Francesco Lombardi Stocchetti

Policy Advisor, Sustainable Finance & Economy

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