Innovation is essential to develop and scale up solutions so that we can limit global temperature rise to 1.5°C and adapt to the impacts of climate change. Innovation can put us on a net-zero carbon, climate resilient pathway. Reaching this pathway will require significant innovations in policy, culture, institutions, sciences, technology, management, and finance. These innovations are most needed in developing countries so that they can avoid the high-carbon development pathways of the past and protect their populations from the worst impacts of climate change. However, while innovations are being developed around the world, developing countries are often not able to take advantage of them. Developing countries face many barriers that impede the flow of capital to climate innovation and investment.
On the occasion of Science and Innovation Day at COP, GCF is pleased to announce its latest working paper. Authored by GCF Executive Director Yannick Glemarec, Accelerating and Scaling Up Climate Innovation: How the Green Climate Fund’s approach can deliver new climate solutions for developing countries examines the main barriers to climate innovation in developing countries, and how GCF is fostering innovation. Read the paper here.
'Climate innovation holds the promise to break negative trends and put us back on track to achieve the Paris Agreement’s goals,' stated GCF Executive Director Yannick Glemarec. 'But we need to deploy dramatic increases in finance to realise the potential of innovation, and to deliver it equally around the world.'
GCF is committed to overcoming barriers to innovation, whether in the development, initial deployment or the wide-spread adoption of new climate solutions. The Working Paper identifies the main barriers to climate innovation in developing countries. Many of these barriers are related to the policy and regulatory environment as well as to technical and macro-economic constraints. The paper then describes the Green Climate Fund’s four-pronged approach to overcome these barriers and to accelerate and scale up climate innovation in developing countries.
GCF's approach is based on:
- helping to nurture a supportive regulatory environment and public support in developing countries;
- deploying GCF resources to accelerate innovation;
- de-risking investment to deploy new climate solutions at commercial scale; and
- strengthening domestic financial institutions to support the widespread adoption of commercially proven new climate solutions.
The Working Paper aims to encourage a debate on how GCF can strengthen its approach to innovation.
Examples of GCF support for innovation include:
- GCF is investing USD 150 million of first-loss equity into the Global Sub-national Climate Fund, which will de-risk private sector climate investments at the critical sub-national levels. Almost half of the 42 participating countries are LDCs and SIDS, and the programme is being implemented by Pegasus Capital Partners and
- working with Jamaica to establish the first Caribbean exchange for green bonds to finance net zero, climate resilient infrastructure in the Caribbean region as part of GCF's Readiness Programme.
- support for a pilot incubator+ and accelerator+ approach to provide seed capital and incubation services for local green technopreneurs in Asia, in partnership with the Korean Development Bank (KDB) and the Global Green Growth Initiative (GGGI).