The global shift to low-carbon, climate-resilient energy systems is underway. Governments know this transition can help spur economic development and meet international climate commitments while preparing for the unavoidable consequences of climate change. Companies are learning that sustainable practices are better for business. Investors are discovering that putting money into these forward-thinking companies is good for returns. And communities are experiencing how clean and resilient infrastructure can create jobs, save money, reduce smog and other public health hazards, and decrease vulnerability to droughts, floods, and storms.
Yet, in many places, clean energy projects—renewables, energy efficiency, demand-side management, electric vehicle infrastructure, and energy storage—face a common barrier: access to financing.
In a financial system that still favors dirty, conventional energy technologies, how do we pay for clean energy projects?
Banks and other investors find it difficult to fund these projects for a range of reasons. For starters, the technologies are relatively new and their revenue models are not very well understood. Sometimes the project size is too small and energy savings seem difficult to ensure, as with residential energy efficiency retrofits. Other times, even if a clean energy project would clearly benefit a family or business, these potential customers don’t know how to take advantage of a clean energy financing program. As a result, many projects that could help lower costs and increase resilience—and help countries drastically reduce climate change–inducing emissions in the long term—are simply not being realized.
To remove financing barriers, NRDC is developing innovative clean energy finance tools through early thought leadership in key markets. In the United States, NRDC played an instrumental role in the successful launch of the New York Green Bank, a state-sponsored entity committed to increasing capital for clean energy projects across the state. Building on our extensive experience in clean energy policy in India and Latin America, NRDC is now working with partners to scale financing solutions—including green banks and green bonds—in both regions.
NRDC is also collaborating with partners to establish the Green Bank Network. This groundbreaking knowledge-sharing platform will offer expertise and experiences from green banks around the world that are leveraging limited public dollars to attract private capital. This network will become an international hub of information for governments and banks looking to reduce the financial barriers to clean energy projects in their countries.
At least $53 trillion of investments in low-carbon energy supply and energy efficiency technology is needed through 2035 to achieve the climate pledges under the United Nations Paris agreement, according to the International Energy Agency—and the bulk of that investment will occur in emerging markets, such as those in India and Latin America. Leveraging our four decades of deep international, finance, and policy expertise, NRDC will partner with local experts to produce game-changing results to expand these clean energy markets that improve cities, safeguard the environment, and boost jobs.