APEC Green Finance Report – Unlocking the Urban Energy Transition

This report describes different global scenarios to reach carbon neutrality by 2050, analyzes their impact on global GDP and on per capita energy consumption, and outlines the existing financing gap. Green finance, underpinned by green taxonomies and to a lesser extent by ESG, has the potential to overcome the financing gap, if it addresses the profitability/risk ratio of green investments. The report describes the whole array of instruments available to APEC cities for improving profitability of green investments. Cities have hitherto mainly used green bonds, green loans and green equity. To limit the risks of green investments, credit risk guarantees are the instrument of choice. Environmental insurance and cat bonds also have a huge potential but require a clear legislative basis. Multilateral financing institutions improve the possibilities of cities to accede to green finance. Various case studies, as well as a set of recommendations, substantiate the report.