The Paris Agreement and Market Signals: A Survey
- Lead PI: David Sandalow , Keith J. Benes, Caitlin Augustin
-
Unit Affiliation: Center on Global Energy Policy (CGEP)
- November 2016 - Ongoing
- Active
- Project Type: Research Outreach
DESCRIPTION: What do investors and infrastructure developers think about the Paris Agreement? What impact do they believe it will have on the availability of capital for clean energy? In a new paper from the Center on Global Energy Policy, David Sandalow, Keith Benes and Caitlin Augustin report on the results of a survey on these topics. Applying a survey methodology widely used in marketing but not previously used in climate policy analysis, they asked several hundred investors, infrastructure developers and others their views on the Paris Agreement, other national and international policies and climate finance. The survey was conducted both before and after the Paris conference with respondents mostly from the United States and United Kingdom.
OUTCOMES: Key Findings From the Survey:
-Respondents viewed national climate policies as the most important tool for increasing funding for climate mitigation and adaptation. These policies included increasing policy support for renewable energy, decreasing fossil fuel subsidies and support for early-stage feasibility studies for green investments.
-Private sector respondents ranked several elements of the Paris Agreement as among the most important factors for “creating a favorable state for climate finance investment,” second only to national climate policies. These results tend to validate the view that the hybrid nature of the Paris Agreement – setting global goals while building a binding international system to support nationally-determined climate policies—has the potential to significantly affect climate finance.
-A robust system of transparency, including details about countries’ domestic implementation and deep-decarbonization plans, could be very important in increasing funding for climate mitigation and adaptation. Many respondents indicated that providing more details about how countries will implement their targets is more important than the target itself.
-A striking result from the survey was the extent to which respondents mostly drawn from the U.S. and U.K. private sectors considered international commitments by governments to increase climate funding to be relatively unimportant in mobilizing climate finance. Respondents appeared to find such pledges to be, at a minimum, several steps removed from decisions on mobilizing on private capital.
-These results suggest that the Paris Agreement has the potential to significantly influence climate finance, including private sector financial decisions. It also suggests strategies and priorities for enhancing that influence.