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This briefing describes how fiscal policy instruments—such as taxes, subsidies, and market mechanisms—can incentivize sustainable actions and discourage unsustainable practices. It highlights Germany's revenue-neutral motor vehicle tax based on CO2 emissions and discusses the applicability of similar province-specific fiscal mechanisms within the Canadian context, specifically for Manitoba.

The document critiques a May 6, 2013, WTO Appellate Body ruling regarding a dispute between Japan, the European Union, and Canada (Ontario) over renewable energy measures. The author contends that the ruling failed to provide necessary legal clarification on WTO rules for sustainable energy and may have created a problematic carve-out in the subsidy agreement. Consequently, the text argues that the responsibility for defining the boundaries of appropriate state incentives for renewable energy lies with WTO members rather than the Appellate Body.

Indonesia possesses the world's largest geothermal potential at 27 GW, yet less than 5 percent has been developed. Investment was historically hindered by regulatory frameworks favoring coal, high exploration risks, and pricing distortions. To counter this, the Indonesian government passed a law in 2003 targeting 6,000MW by 2020, established a geothermal exploration fund in 2011 to share risk, and implemented a regional feed-in-tariff. While the country is unlikely to meet its original targets, these 'readiness' activities, supported by international partners, are intended to create a stable environment for scaled-up investment.

The report analyzes the energy landscape of Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama, noting a growing dependence on imported fossil fuels despite significant renewable potential. It highlights that while the region leads in hydropower and geothermal energy, resources like wind and solar remain underutilized. The document identifies critical gaps in resource data, socioeconomic assessments, and administrative efficiency, while recommending a 'long, loud, and legal' policy approach to attract investment and achieve a 100 percent renewable electricity grid.

The report examines industrial policy as a tool for structural economic transformation, contrasting traditional methods—such as import substitution and export promotion—with 'green industrial policy' designed to address environmental externalities. It argues that while market forces are generally preferred, government intervention is justified by market failures like coordination gaps and credit imperfections. The author identifies best practices, including the use of performance-based 'sunset clauses' and close government-industry collaboration. Green industrial policy is presented as a 'second-best' alternative to carbon pricing, requiring larger-scale intervention to stimulate both supply and demand for environmentally friendly technologies.

Thailand has achieved rapid growth in renewable energy, particularly solar power, through a combination of incentive policies, simplified regulations, and civil society engagement. Key mechanisms include the Small Power Producer (SPP) and Very Small Power Producer (VSPP) programmes, and the 'Adder' feed-in premium. While these policies attracted significant private investment and increased capacity, the government is now transitioning toward a more sophisticated feed-in tariff to manage costs and balance the energy portfolio, as solar growth has significantly outpaced other renewable sources.

The document argues that while public and private funding for climate-resilient development is increasing, it remains insufficient to limit global temperature rise to below 2 degrees Celsius. It highlights the need for a more equitable international climate finance architecture, specifically calling for the inclusion of least developed countries and small island developing states in the design of the Green Climate Fund (GCF). The brief emphasizes that climate change should be treated as an economic concern managed by national ministries of finance and planning, and that public finance must be used strategically to unlock the private sector, which is expected to provide over 85% of the necessary funding.

The report details climate finance in Germany across five key sectors. In 2010, the energy sector saw EUR 10.3 billion in climate-specific investment, dominated by private funding (98%) and renewable energy. The buildings sector received at least EUR 16.3 billion, primarily from households. The agriculture sector saw EUR 5.4 billion, almost entirely in renewables. Industry climate-specific investment was EUR 579 million in 2009, mostly for energy efficiency. Transport climate-specific investment averaged EUR 559 million, focused on energy-efficient vehicles. The report highlights the critical role of the public bank KfW in providing concessionary loans and the influence of the Feed-in Tariff on private investment.

The report assesses Thailand's renewable energy incentives, highlighting the success of the ENCON fund and the 'adder' (feed-in premium) scheme, while identifying persistent barriers such as transmission constraints and high import duties on technology.

Kenya is diversifying its energy mix by prioritising geothermal power to reduce its reliance on climate-vulnerable hydroelectricity. The government has established the Geothermal Development Company (GDC) to mitigate high upfront exploration risks, implemented feed-in tariffs, and leveraged carbon finance to attract investment. While facing technical skill shortages and geological challenges, Kenya aims to significantly increase geothermal capacity by 2030 to support economic growth and rural electrification.

The report identifies significant gaps in risk mitigation for clean investments, particularly regarding policy and financing risks. It categorizes risks into four groups: political/policy/social, technical/physical, market/commercial, and outcome risks. In developed markets, gaps are most acute for policy risk due to retroactive support cuts and for technical risks in immature technologies. In developing markets, while the supply of political risk insurance is higher, policy risk remains under-covered and financing risks are exacerbated by weak domestic financial institutions. The authors argue that an optimal risk allocation framework should assign exogenous risks (like policy) to the public sector and endogenous risks (like technical) to the private sector.

The document examines policy risk—defined as unexpected government regulatory changes—and its impact on renewable energy investments. It analyzes existing tools like MIGA and OPIC political risk insurance and World Bank partial risk guarantees, while detailing a new OPIC FiT insurance product. The report concludes with recommendations for improving these instruments through standardization, expanded geographic scope, and better integration with credit rating agency methodologies to enhance project bankability.

The report examines Indonesia's renewable energy landscape, focusing on the institutional and regulatory frameworks governing geothermal, hydro, biomass, and biofuels. It identifies a wide array of financial, fiscal, and market-based incentives, such as the Geothermal Fund Facility and feed-in tariffs, but notes that their impact is undermined by conflicting government policies, including heavy fossil fuel subsidies and inter-ministerial disagreements.

The report analyzes how public resources and well-articulated policies can mitigate risks and costs to attract private capital for green investments. Using case studies from Tunisia, the UK, and Morocco, it demonstrates that targeted public interventions—such as credit guarantees, feed-in tariffs, and concessional lending—can overcome market inertia and perceived risks. It highlights the importance of emerging economies, particularly the role of National Development Banks in China and Brazil, and suggests innovative risk mitigation tools like policy risk insurance and first-loss protection to address gaps in the current financial landscape.

The report examines Viet Nam's investment incentive framework for renewable energy, analyzing financial, fiscal, and market-based supports. While the government has established a policy framework including tax exemptions and price subsidies, stakeholder interviews suggest these incentives have a limited effect on investment decisions due to low electricity off-take prices, regulatory opacity, and a lack of trust in government guarantees. The study highlights a contrast between the modest success of small hydropower and the struggles of wind and biogas projects to achieve financial viability.

In 2010, Germany invested at least EUR 37 billion (1.5% of GDP) in climate-specific measures, with over 95% of this funding provided by the private sector. Renewable energy generation was the primary recipient of these funds, totaling EUR 26.6 billion, while energy efficiency received EUR 7.2 billion in incremental investment. Public policy played a critical enabling role through the Feed-in Tariff (FiT), which paid approximately EUR 13.1 billion to generators, and concessionary loans from public banks, which accounted for 43% of renewable energy and 72% of energy efficiency investments. The report highlights a significant lack of systematic monitoring, reporting, and verification (MRV) for climate finance in Germany, noting that effectiveness is currently only evaluated for single programs rather than the broader landscape.

In 2010, Germany invested at least 37 billion euros (1.5% of GDP) in climate mitigation, with over 95% of funding originating from the private sector. Renewable energy dominated investments at 26.6 billion euros, largely driven by small-scale projects and supported by feed-in tariffs and low-interest loans from state banks. However, the report identifies significant gaps in data transparency, a lack of systematic effectiveness assessments for public funding, and a potential imbalance between small-scale installations and large-scale infrastructure and grid expansion.

In 2010, Germany invested at least EUR 37 billion (1.5% of GDP) in climate-specific measures, with the private sector providing over 95% of this finance. Renewable energy generation was the primary recipient, attracting EUR 26.6 billion, while energy efficiency received EUR 7.2 billion in incremental investment. Public banks, particularly KfW and Rentenbank, played a critical role by providing EUR 16.5 billion in concessionary loans, which accounted for 43% of renewable energy and 72% of energy efficiency investments. The report highlights significant data gaps, noting that climate finance is not systematically tracked in public budgets or by the private sector, and recommends establishing a central registry and improved reporting standards to evaluate policy effectiveness.

The research proposes a valuation approach for wind farms that combines a trinomial lattice to model mean-reverting electricity prices with Monte Carlo simulations to account for intermittent wind generation. Using UK data, the authors compare various support mechanisms, including feed-in tariffs, market premiums, and initial capital subsidies. The findings indicate that the option to delay investment significantly increases project value, and that one-time initial subsidies are more effective at triggering immediate investment than long-term premiums per unit of electricity produced.

The document identifies five key realms for renewable energy policy: direct purchase mandates, improving the business case through financial incentives, removing non-price barriers, supporting research and development, and addressing grid intermittency. It recommends that Japan maintain its generous feed-in tariffs, expand demand response, and unbundle transmission from generation to increase competition. The report provides detailed international case studies from the US, Germany, and other nations to illustrate effective mechanisms such as Green Banks, loan guarantees, and carbon taxes.