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Will private finance pay the climate bill?

When western governments are talking about climate finance they rapidly tend to focus on the potential of "private finance". Considering the impacts of the financial crisis and the difficulties to mobilize public sources, this is an obvious choice. However, there is no pile of cash lying around with a sign "private finance".

DanChurchAid, the Danish member of the ACT alliance, have made an analysis of the potential for private finance, in relation to the long term developed country commitment to mobilize climate finance.

The conclusion is clear. In spite of good potential in certain areas private finance isn't likely to become the "silver bullet" western governments are hoping for. Private investments are made to generate profit, and many of the important activities, to be paid by climate finance, have big difficulties to attract private investors. The analysis also highlights the risk of passing on the climate bill to developing countries. When investments are to give profit someone will have to pay, and in some cases this may lead to increased costs for developing countries.

You can download the paper at the website of the ACT alliance: http://www.actalliance.org/stories/will-the-private-sector-pay-the-... 

 

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