1. Navigating Low-Carbon Finance Management at Banks and Non-Banking Financial Institutions
- Author:
- Naoyuki Yoshino and Farhad Taghizadeh-Hesary
- Publication Date:
- 08-2019
- Content Type:
- Working Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Lack of long-term financing, the existence of various risks, the low rate of return, and lack of capacity in market actors are major challenges for the development of low-carbon projects. This paper attempts to provide guidelines for governments and financial institutions by highlighting practical solutions as enabling conditions of low-carbon finance and investment. Such solutions include increasing the role of public financial institutions, increasing the share of non-banking financial institutions in long-term investments, using the spillover tax to increase the rate of return, developing green credit guarantee schemes to reduce the credit risk, and addressing low-carbon investment risks via financial and policy de-risking. These solutions are analysed in detail and considerations for their implementation are discussed throughout the paper. Tools and instruments for low-carbon investments and a practical example of the implementation of the proposed tools are also provided in this paper
- Topic:
- Climate Change, Infrastructure, Banks, Credit, and Financial Institutions
- Political Geography:
- Global Focus