Sustainable Climate Finance and its Impact (SUFI)
Description of Project
This research project aims at fully understanding the climate finance project cycle: from allocating resources and incentivizing investments over measuring the impact of these projects, both in terms of mitigated carbon emissions and additional inter-action with the sustainable development goals, to the link between investment strategies and project effectiveness. Key research questions include: are there capital market imperfections that hamper an efficient allocation of capital? Are there other barriers in legal systems, energy policy and energy system governance that increase the investment risks and/or reduce returns? What are the actual impacts of these projects and do they really help mitigating carbon emissions (‘additionally’) and divert developing economies on a more sustainable development path?
Research provided in the Project:
- Conducting literature review to synthesize the current state of knowledge on modelling investment decisions in energy system models and explore the knowledge of capital market failures that need additional and specific instruments to improve the effectiveness of environmental policies;
- Developing a theoretical framework to assess investment support policies;
- Calibrating the model in order to use it to assess specific policy instruments in specific environments;
- Applying the numerical model to conduct policy instrument assessment;
- Publishing a report that synthesizes the insights from the first working package that identifies overarching principles in the efficiency and effectiveness of climate finance and the insights from the second working package that studies the impact of individual sustainable energy projects on carbon reduction and improvement of livelihoods;
- Publishing policy briefs that summarize findings of the SUFI project and provide policy discussions to facilitate communications with policy and decision makers as well as other stakeholders.