How to Finance the Low Carbon Transition: The Role of the Financial System

Without a dramatic reduction of greenhouse gas emissions by all countries, the window of opportunity to limit global warming to two degrees Celsius will soon be shut forever. Heads of state have agreed in the United Nations Framework Convention on Climate Change (UNFCCC) to cap emissions before 2020 and curb them ambitiously beyond that. 

Energy transition presupposes a shift in production and consumption patterns in a variety of sectors to change our economies on a large scale. This means mobilising important public and private funds to spur sustainable low-carbon growth compatible with the two-degree cap.

Public funds will be indispensable to achieving such large-scale and profound economic change – but they will be far from enough. All the economic and financial instruments that that can contribute must be taken advantage of. The financial system, with its fundamental role in mobilising savings to finance investments, therefore stands to play a crucial part in this change.  

There has been increasing dialogue on finance’s role in reducing carbon emissions in recent months. Merits of the various public and private financial tools have been intensely debated to identify those most likely to sustain the energy transition. Many innovative proposals are being developed, the merits of which can sometimes fuel heated controversy. Financial actors as varied as private funds, market players, regulatory authorities, central banks, promotional and commercial banks, governments, companies and individuals are taking concrete action around the world.

The aim of this webpage, co-hosted by France Stratégie and CEPII, is to provide a medium for experts and non-experts to discuss the merits and the limits of the various proposals and initiatives in the field of international finance. It is intended to become a forum where the debate on the financial system’s contribution to the energy transition can flourish.

With objectivity and diversity in mind, France Stratégie and CEPII will chose the contributions based on the quality of their arguments and the extent to which they further the debate. France Stratégie and CEPII will therefore exert minimal editorial. They will focus on ensuring contributions are relevant, structured, backed by arguments and respect the rules of open and democratic debate. It follows that France Stratégie and CEPII neither endorse nor support any of the particular proposals or viewpoints to be posted, which remain the responsibility of the individual authors.

Contributions and comments, which should be no longer than 1 500 words (roughly three pages), should be sent to the following email address: strategie@strategie.gouv.fr