Policy Action to Mobilize Climate Finance, and Market Responses

The report argues that while private capital flows to clean energy are increasing, breakthrough technologies like clean hydrogen and sustainable aviation fuels (SAF) require targeted public intervention to bridge investment gaps. It highlights the role of the public sector in driving action through incentives and mandates, creating regulatory certainty, and setting global standards. The document examines specific policy levers such as the US Inflation Reduction Act and the EU's 'Fit for 55' package, while noting that financial institutions still face barriers including a lack of bankable projects and a mismatch between risk profiles and returns.

• Public sector intervention is essential to mobilize private capital for breakthrough technologies because private financing blueprints alone cannot drive capital at the necessary speed and scale for net-zero decarbonization.
• The US Inflation Reduction Act (IRA) provides significant financial incentives for clean energy, allocating $16.4 billion in tax credits to hydrogen and carbon capture, utilization and storage (CCUS), and $8.6 billion to low-emission fuels including sustainable aviation fuels (SAF).
• Regulatory mandates are effective tools for committing demand and spurring investment in sustainable aviation fuels; for example, the EU's 'Fit for 55' package requires a 2% SAF blend by 2025 and 6% by 2030.
• Investment in clean hydrogen remains challenging, with the International Energy Agency estimating that only 4% of proposed projects reach a final investment decision, while the Hydrogen Council estimates this figure at approximately 10%.
• Financial institutions face several systemic barriers to climate investment, including a mismatch between risk and return profiles, a lack of 'bankable projects' due to internal resource constraints, and insufficient data on emissions reduction potential and sector transition plans.
• The public sector can most effectively mobilize funding by focusing on three priority areas: driving action through incentives and mandates, creating long-term regulatory certainty, and establishing global standards to define green products and avoid greenwashing.

APA

World Economic Forum (2023). Policy Action to Mobilize Climate Finance, and Market Responses. https://www3.weforum.org/docs/WEF_Policy_Action_to_Mobilize_Climate_Finance_and_Market_Responses_2023.pdf

Chicago

World Economic Forum. Policy Action to Mobilize Climate Finance, and Market Responses. 2023. https://www3.weforum.org/docs/WEF_Policy_Action_to_Mobilize_Climate_Finance_and_Market_Responses_2023.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Policy Action to Mobilize Climate Finance, and Market Responses |date=November 2023 |url=https://www3.weforum.org/docs/WEF_Policy_Action_to_Mobilize_Climate_Finance_and_Market_Responses_2023.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2023policy, author = {{World Economic Forum}}, title = {{Policy Action to Mobilize Climate Finance, and Market Responses}}, institution = {World Economic Forum}, year = {2023}, month = nov, url = {https://www3.weforum.org/docs/WEF_Policy_Action_to_Mobilize_Climate_Finance_and_Market_Responses_2023.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }