Moving the Fulcrum

The document argues that public finance should be targeted to improve the risk-reward calculus of low-carbon markets in developing countries to bridge a significant climate finance gap. It suggests using specific instruments like political risk guarantees and first-loss equity to attract private capital away from fossil fuels.

• Developing countries face a substantial and growing climate change mitigation investment gap, with requirements estimated at up to $300 billion annually by 2020 and increasing to $500 billion annually by 2030. The commitment by industrialized nations to mobilize $100 billion annually by 2020 is insufficient to meet these needs.
• There is a significant opportunity to redirect private sector capital flows toward low-carbon development, noting that the financial stock of developing countries grew by $11 trillion in 2011.
• Private sector investment is hindered in developing countries because low-carbon and financial markets often lack transparency, liquidity, adequate size, and an attractive risk-reward calculus.
• The public sector can mitigate political and macroeconomic risks—such as exchange rate volatility and political instability—through the use of local currency loans, interest-rate/currency exchange products, and political risk guarantees.
• Public financing instruments should be tailored to the maturity of the low-carbon market: first-loss equity, debt investments, and concessional loans are suited for newer markets, while flexible loans, risk sharing facilities, and partial risk and credit guarantees are better for established markets like wind, solar, and energy efficiency.

APA

World Resources Institute (n.d.). Moving the Fulcrum. https://www.wri.org/research/moving-fulcrum

Chicago

World Resources Institute. Moving the Fulcrum. n.d. https://www.wri.org/research/moving-fulcrum.

Wikipedia

{{cite report |author=World Resources Institute |title=Moving the Fulcrum |url=https://www.wri.org/research/moving-fulcrum |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendmoving, author = {{World Resources Institute}}, title = {{Moving the Fulcrum}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/moving-fulcrum}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }