We've been pressing governments - and the UNFCCC's Green Climate Fund - to use public finance mechanisms (PFMs) to support low-carbon investments. Yet not enough work has been done on evaluating the relative efficiency of PFMs.
1. The UK's Green Deal legislation went through Parliament this week - Hurrah! It allows residential retrofit loans to be repaid via electricity bills, and ties the loan to the house rather than householder. It will significantly reduce the risks of default, eventually allowing investment grade (climate) bonds to be issued against portfolios of these loans. It's a model that will need to be adopted in other countries if we're going to reduce emissions from the housing sector - but, it won't by itself solve the problem of take-up.
As the Cancun sun sets .... Russia helps sink Kyoto / UK Climate Change Committee a hit / Climate Finance Fund gets up / China’s low carbon Five Year Plan ... see below.
1. The UK Climate Change Committee (a statutory body under their Climate Action Bill) was popular amongst Cancun NGOs this week with its call for 60% emission cuts in the UK by 2030 and 50% by 2025. One NGO newsheet called it a “ray of sunshine”.
Responsible Investor journal reported last week that Alain Dromer, the new chairman of the the Association of British Insurers Investment Committee, had called for the re-activation of the securitisation markets to help develop environmental investment opportunities. Absolutely right.
The PACE (Property Assessed Clean Energy) program, strongly pushed by the US Department of Energy as the ideal financing model for residential solar panels and energy efficiency, is in trouble. It may have implications for the UK's PAYS scheme. The bonds are candidates to be called climate bonds.
