Reducing the cost of capital to finance the energy transition in developing countries

Climate stabilization necessitates substantial investments in low- and zero-carbon technologies, particularly in developing economies. However, access to affordable finance varies greatly. This study incorporated empirically estimated, country- and technology-specific costs of capital into five climate-energy-economy models. Results show that alleviating financial constraints in developing regions benefits both climate goals and equity through increased renewable energy access and affordability, highlighting the need for fair finance and its inclusion in model-based assessments.

M. Calcaterra, L. Aleluia Reis, P. Fragkos, T. Briera, H. S. de Boer, F. Egli, J. Emmerling, G. Iyer, S. Mittal, F. H. J. Polzin, M. W. J. L. Sanders, T. S. Schmidt, A. Serebriakova, B. Steffen, D. J. van de Ven, D. P. van Vuuren, P. Waidelich, M. Tavoni