This paper fills a gap in the macroeconomic literature on renewable sources of energy. It offers a definition of green investment and analyzes the trends and determinants of this investment over the last decade for 35 advanced and emerging countries. We use a new multi-country historical dataset and find that green investment has become a key driver of the energy sector and that its rapid growth is now mostly driven by China. Our econometric results suggest that green investment is boosted by economic growth, a sound financial system conducive to low interest rates, and high fuel prices. We also find that some policy interventions, such as the introduction of carbon pricing schemes, or “feed-in-tariffs,” which require use of “green”energy, have a positive and significant impact on green investment. Other interventions, such as biofuel support, do not appear to be associated with higher green investment.
One of the strong messages that came out of the United Nations Climate Change conference in Durban was that the private sector has to play an important role if we are to globally move toward a low carbon, climate resilient—or “climate compatible”—future. However, private investment will only flow at the scale and pace necessary if it is supported by clear, credible, and long-term policy frameworks that shift the risk-reward balance in favor of less carbon-intensive investment. The private sector also needs information on where to invest in clean energy in emerging markets, and it needs policy support to lower investment risk. Barriers to low carbon investments often include unclear and inconsistent energy policies, monopoly structures for existing producers, stronger incentives for conventional energy than clean energy, and a domestic financial sector not experienced in new technologies.
This brief examines the reasons behind the current drive towards sustainable public procurement (SPP), and the barriers that have to be overcome in order to implement it. It also looks at the key benefits and methods involved in SPP and green public procurement (GPP). The author explains that a significant share of the world’s GDP is associated with expenditures by governments. On average, total public expenditures by central and local governments are estimated to account for about 20% of GDP in OECD countries, and roughly 15% in non-OECD countries.
Governments have increasingly become involved in making their procurement “greener” or more sustainable. While green procurement and sustainable procurement refer to different concepts, the underlying idea is the same: to use public procurement in order to achieve desirable environmental and, in the case of sustainable public procurement, social outcomes.
Reasons for engaging in GPP or SPP include:
This report is very much focused on private sector led initiatives to responding to climate change. The report is based upon the results of a survey of business leaders committed to advancing climate action, especially in ways that build the resilience of vulnerable communities in developing countries. It offers help to companies with national, regional or global reach to develop strategies for dealing with the immediate to long‐term consequences of climate change in developing countries where they have operations, supply chains, employees, or customers.
The natural world has a lot to teach us. Above all, it teaches us about systems and cycles; that altering one component of a system, however small, can have wider implications within and beyond a given cycle. Human society, the planet and the economy are all systems and are all bound together in intricate relationships. Only when we begin to understand this bigger picture can we tackle the systemic problems facing us. Here we take a short journey through planetary science to grasp some of the dimensions of those relationships, and posit a series of solutions for affecting the kind of systemic transformation that we urgently need to ensure the health of the planet and of people.
Economic theory (and common sense) tells us that when something is valuable, and it is free, its use tends to infinity – this explains why trees, biodiversity, freshwater and atmospheric space for carbon are all being used ‘like there is no tomorrow’. It also assumes that when something is exhausted (or too expensive), a substitute is almost certain to be found.