Financing and investing in the transition
The energy transition is in full force and countries around the world have set course towards decarbonising their societies. The European Union is in the process of implementing its largest-ever climate programme – the European Green Deal, a twin strategy to decarbonise the European economy and ensure sustainable growth. The United States is accelerating its energy transition through large climate investment bills and China is doubling down on solar and wind power generation, with emphasis on the role of green finance. Many emerging economies are also increasingly investing in green technologies.
As governments move further into implementing the Paris Agreement, private and public finance will have to be channelled to green investments, away from activities that drive climate change. Policymakers across the world will have to address questions such as how to finance the necessary infrastructure investment programmes and which policies most effectively and efficiently mobilise private investment in decarbonisation.
Agora’s work focuses on how to reform fiscal and financial policy frameworks to make them most fertile for green innovation and investment, from corporations to individual households. In Europe, we work to improve the effectiveness of the EU budget and other financial instruments. International aid and cooperation are important to support the Global South in the transition, for instance with regards to Joint Energy Transition Partnerships (JETPs) that play an increasingly important role in countries like South Africa, Indonesia, and Vietnam.
Understanding the fiscal, economic, and social implications of green investment is increasingly important. This includes topics such as labour market effects of the transition and necessary measures to close the skills gap, the interplay with fiscal policy as well as distributional effects of climate and energy policies. Agora works to make the energy transition affordable for everyone and aims at developing policy recommendations that are socially balanced and where particularly lower income groups benefit.