Private investors – often supported by public policy and finance – are already channeling significant amounts of money into the low-carbon economy in countries around the world, but much more investment is needed in order to tackle the climate challenge.
Well-designed financial instruments and appropriate public support that reduce private investors’ risks and improve their financial returns could play a central role in global efforts to address the adaptation and mitigation needs of developing countries.
The Global Innovation Lab for Climate Finance catalyzes this process by drawing on experience and expertise from around the world to identify, design, and pilot the next generation of climate finance instruments. These instruments will provide concrete solutions to financing challenges faced in real projects, and can build new markets, attract new investors, and help to unlock billions of dollars in new climate-friendly investment in developing countries.
The Lab is part of broader government and private sector efforts to scale up climate finance. It aims to respond to the urgency of the climate challenge by accelerating promising climate finance proposals so that they are ready to implement. By quickly developing project-ready solutions that can be implemented in the short term it aims to complement existing processes. The Lab stands out for its goal of moving quickly from talk to action.
The Lab includes leaders from governments, pension funds, investment banks, project developers and development finance institutions. Present members comprise a small, senior group of policy makers, financial experts, practitioners, and project developers. The Lab also seeks advice from beyond its membership to ensure that analysis is robust, to source further analytical, technical, commercial, and political know-how, and to build the support necessary to launch pilots.
The Lab has been developed by the UK, U.S. and Germany in partnership with several climate finance donor countries (Denmark, France, Japan, the Netherlands, Norway) and key private sector representatives. These countries felt that more could be done to coordinate efforts to test innovative approaches to delivering climate finance. By drawing on the experience and expertise of developing country governments and experts The Lab will ensure that climate finance instruments are implementable and address real investment needs.
Climate Policy Initiative acts as secretariat for The Lab and provides analytical support to The Lab’s expert members, each of whom has committed to help follow through on its recommendations.
Analytical and secretariat work of The Lab has been funded by the UK Department of Energy & Climate Change (DECC), the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB), the U.S. Department of State, the Netherlands Ministry for Foreign Affairs, Bloomberg Philanthropies, and The Rockefeller Foundation.
Climate Policy Initiative serves as The Lab Secretariat and has led the analysis of proposed instruments, drawing on the expertise of Lab members and additional financial and investment leaders as appropriate.