Clean energy finance, such as for wind and solar technologies, flows primarily to fast-growing, middle-income countries, leaving the lowest-income countries who are least equipped to bankroll their own energy transitions in the dark. Breaking private-sector finance biases and multilateral development banks and development finance institutions providing the necessary long-term investments in clean energy can help remediate this.
In 2009, high-income countries pledged to provide $100 billion annually to lower-income countries to fuel their low-carbon transitions and sustainable growth. The pledge is founded on the principles of justice and equity — industrialized nations bear the greatest responsibility for historical emissions and should therefore assume responsibility for supporting the financing of low- and middle-income countries’ efforts to combat and cope with the negative effects of climate change.
Regrettably, this pledge has not been honored, sowing seeds of distrust between LMICs and their wealthier counterparts.
About the authors
Jamie Rickman
Jamie Rickman received her Ph.D. from the Francis Crick Institute in the Physics of Living Systems. Her research interests now lie in applying complexity thinking to the area of climate finance. She uses computational, network, and data science approaches to study the ecosystems of investors behind fossil fuel and green investments.
Sumit Kothari
Sumit Kothari is a doctoral researcher in climate finance at the Institute for Sustainable Resources, University College London. He uses a systems approach to analyze financial flows for the net-zero transition with a particular focus on low- and middle-income countries.
Nadia Ameli
Nadia Ameli is an experienced researcher on economic, finance, and policy aspects of climate change and related energy issues. She is a principal research fellow with a proleptic academic appointment at the UCL Institute for Sustainable Resources. Her work explores the cross-cutting role of finance in the global transition to a low-carbon economy, with a particular emphasis on avenues for integrating finance elements into climate policy design to trigger investment growth.
