http://www.nytimes.com/2016/09/20/opinion/how-to-raise-trillions-for-green-investments.html 2016-09-20 10:10:53 How to Raise Trillions for Green Investments Governments must create the conditions to encourage private investment in clean technologies and sustainable development. === SAVING our planet from the worst effects of climate change won’t be cheap. A As a point of comparison, global gross domestic product in 2015 was $73 trillion. But there is no question that the world needs to ramp up its transition to a low-carbon, environmentally sustainable and resilient economy, and to do so rapidly. The question is, how do we pay for it, given the limited availability of government funding, particularly in developing countries? The answer: private financing. The good news is that there is a global abundance of private capital. To unlock these riches, governments must create conditions that encourage private investment in clean technologies and sustainable development. With smart, well-designed and coordinated policies, financing models and instruments like bonds and incentive programs, countries have the potential to solve some of the planet’s most pressing environmental challenges while still maintaining economic growth. That is why it is essential for world leaders meeting in New York this week for Understanding how government can spur this type of investment was a focus of the recent G20 summit meeting in Hangzhou, China. For the first time, these countries There have been successful experiments in green finance. The global green bond market is growing The challenge now is to build on these successes and ensure that green finance mechanisms are widely adopted so that capital markets can allocate financing to low-carbon sectors of the economy that have the potential to generate growth and jobs. For this to happen, countries will need to adopt policies that reduce the price of low-carbon investments to make them more attractive for private investors. These policies include environmental regulations to stimulate clean, sustainable development; incentives and subsidies for clean energy investments; and the pricing of carbon emissions, which can be done in a variety of ways, including emissions trading and taxes. We also need to eliminate subsidies that encourage the use and extraction of carbon-based energy like coal and oil. Such policies will take strong political will, especially as economic growth is slowing. China has taken important steps in this direction and has declared green finance a “strategic imperative.” The country faces a significant challenge. It needs $1 trillion over the next five years to make investments in efficient buildings, low-carbon transportation and clean energy in its cities. But the government can afford to finance only 15 percent of that, according to Accordingly, China recently began an initiative to raise private capital through the sale of green bonds. After just six months, these bonds now account for 40 percent of the global market. Recent guidelines issued by the government outline an ambitious road map for creating green lending, environmental stress tests, benchmarks to ensure credibility of green investments, disclosure requirements and innovative public private partnerships. For instance, the China also has announced plans to create a nationwide carbon market in 2017 that is on track to become the largest in the world. Pilot exchanges already allow Chinese pollution emitters in several cities to trade carbon credits, earned by reducing emissions, to other companies that have been less successful in reducing their carbon discharges. In this way, China is trying to turn an environmental liability into an economic asset. If these exchanges work, they will be powerful examples for the rest of the developing world. Financing the world’s transition to a low-carbon economy will be costly, but we can’t afford not to do it and, it is important to note, it is