ODI Logo ODI

Trending

Our Programmes

Search

Newsletter

Sign up to our newsletter.

Follow ODI

Transition finance for emerging economies

Briefing/policy papers

Written by Judith Tyson, Prashant Vaze

Image credit:World Bank Group

Finance to support investments aimed at reducing greenhouse gas emissions in hard-to-abate sectors, such as cement, steel, plastics, trucking, shipping, and aviation - also referred to as ‘transition finance’ - must be expanded. This policy brief suggests options for G20 members to unlock these financial flows.

Collectively, hard-to-abate sectors represent 30% of energy-related GHG emissions and cannot be ignored in the pursuit of a just economic and energy transition. Technological innovation, financial support, and an enabling policy environment are needed to shift them towards low- or zero-emissions.

The brief explores what more the G20 can do to unlock transition finance, how central banks and governments can work together to mobilise private finance, the potential of sustainable finance taxonomies and climate-related risk disclosures to direct private transition finance, and the additional steps needed to create an enabling policy environment for these hard-to-abate sectors