海外发展研究所-新兴经济体的转型融资（英）-2023-WN7.pdf
CIFF WP4 Policy Brief Transition finance for emerging economies Policy priorities for the G20 Judith Tyson and Prashant Vaze July 2023 Key policy recommendations Finance to support investments to reduce greenhouse gas(GHG)emissions from hard-to-abate sectors,also referred to as transition finance,needs to be expanded.This will require:Mandatory climate-related disclosures and capital adequacy frameworks aligned to major export markets regulatory requirements,with weightings that favour credible and ambitious transition planning.Carbon pricing to align transitioning industries economic and environmental performance incentives while protecting industry from high-carbon substitutes produced outside jurisdictions and permitting imports from jurisdictions with effective carbon pricing policies.Strengthened supply-side public policy including tighter regulations to oblige new technology uptake,national decarbonising visions,innovation subsidies and procurement standards,streamlined legal and licensing procedures,and transition project pipelines.Greater use of public expenditure including blended finance,leveraging government subsidies,issuance of public transition bonds,public technology development and transfer and capacity-building for finance professionals.Increased policy lending such as mandatory sector targets,higher sectoral and borrower limits and coordinated national policy for hard-to-abate sectors.CIFF WP4 Policy Brief:Transition finance for emerging economies 2 Readers are encouraged to reproduce material for their own publications,as long as they are not being sold commercially.ODI requests due acknowledgement and a copy of the publication.For online use,we ask readers to link to the original resource on the ODI website.The views presented in this paper are those of the author(s)and do not necessarily represent the views of ODI or our partners.This work is licensed under CC BY-NC-ND 4.0.How to cite:Tyson,J.and Vaze,P.(2023)Transition finance for emerging economies:policy priorities for the G20.Policy Brief.London:ODI(https:/odi.org/en/publications/transition-finance-for-emerging-economies/)CIFF WP4 Policy Brief:Transition finance for emerging economies 3 Contents 1 Introduction 6 2 Supporting private transition finance 8 2.1 The landscape for private transition finance 8 2.2 Adapting bank regulatory frameworks to discourage climate risky lending 9 2.3 Developing specialist instruments and funds 10 2.4 Policy lending 10 3 Transition taxonomies and standards 11 3.1 Transition taxonomies and green taxonomies 11 3.2 International taxonomies 12 3.3 Voluntary standard setting and disclosure 14 4 Creating an enabling policy environment 15 4.1 Supply-side public policies 15 4.2 MDB and DFI support 16 4.3 Funding research and development 17 4.4 Demand-side public policy interventions 17 4.5 Cross-cutting policy interventions 18 CIFF WP4 Policy Brief:Transition finance for emerging economies 4 Acknowledgements We would like to thank Sarah Colenbrander and Lorena Gonzalez for supervision and helpful comments on the outline and an earlier version of this draft.We are grateful to The Childrens Investment Fund Foundation for their financial support to Unlocking finance for Indias transition to a resilient,Paris-aligned economy.The usual disclaimers apply.About the authors Judith Tyson Judith Tyson is a specialist in finance for development,including financial market development,private investment and climate finance.Her research interests include green bonds,private climate finance and financial development.Prashant Vaze Prashant Vaze is an environmental economist and climate finance specialist.He has held positions in the UK civil service,environmental NGOs,a pensions firm,and a green finance think tank.He has worked in Hong Kong and is currently based in India.Acronyms AfDB African Development Bank ADB Asian Development Bank ASEAN Association of Southeast Asian Nations CA 100+Climate Action 100 plus CBI Climate Bonds Initiative CDP Carbon Disclosure Project EM Emerging market ESG Economic,social and governance EU-ETS EU Emissions Trading System G20 Group of 20 GHG Greenhouse gas MDB Multilateral development bank METI Ministry of Economy,Trade and Industry(Japan)NGFS(Central banks and supervisors)Network for Greening the Financial System OECD Organisation for Economic Co-operation and Development OJK Otoritas Jasa Keuangan(Indonesian financial regulator)SBTi Science Based Target Initiative SFAC Sustainable Finance Action Council(Canada)SFWG Sustainable Finance Working Group SLB/L Sustainability linked bond/loan TCFD Taskforce on Climate-Related Financial Disclosures CIFF WP4 Policy Brief:Transition finance for emerging economies 5 TPI Transition Pathways Initiative US-ICEF United States-India Clean Energy Facility CIFF WP4 Policy Brief:Transition finance for emerging economies 6 1 Introduction An unresolved item on the climate agenda is accelerating the transition in high-emission,hard-to-abate sectors such as cement,steel,plastics,trucking,shipping and aviation.Together these represent 30%of energy-related greenhouse gas(GHG)emissions.They are also essential for economic development in a net-zero world.Technological innovation,financial support and an enabling policy environment are needed to transition them to low-or zero-GHG emissions(IPCC,2023;Energy Transitions Commission,2023).Substantial bank lending is available to these sectors including in major emerging markets1 but it is not applied to transition investments.International private finance for emerging economies is limited because of general risk aversion and disincentives to investment in hard-to-abate sectors.This adds to the challenges for emerging economies,including that their hard-to-abate industrial sectors constitute a larger share of their economy2 with proportionately larger fossil fuel production and emission-intensive industries,such as mining,agriculture and heavy industry(Ahman,2020).Under the Indonesian Presidency the G20 highlighted the need for private transition finance for emerging economies and established the G20 Transition Finance Framework.This document set the agenda through five pillars to mobilise more sustainable finance(G20 FMCB,2022;G20 SFWG,2023).These five pillars are:1)Identifying transitional activities and investments 2)Reporting information on transition activities and investments 3)Developing transition-related finance instruments 4)Designing policy measures 5)Assessing and mitigating negative social and economic impacts of transition activities and investments.1 Defined as 95 emerging market and middle-income economies(MICs).https:/www.imf.org/external/datamapper/datasets/FM 2 By contrast,in low-income countries(LICs)there is a lack of a substantive existing private sector that will require transitioning,although pure green finance and development finance will continue to be critical.CIFF WP4 Policy Brief:Transition finance for emerging economies 7 This paper looks at what more the G20 can do to unlock transition finance for emerging economies,with a focus on Pillars 1,2,3 and 4 of this framework.Pillar 5 is a cross-cutting recommendation running through the other four.Section 2 discusses the landscape for private finance for transition and how central banks and governments can direct more private finance into transition investments,including through adaptive capital adequacy frameworks,encouraging innovative financial instruments and using policy lending.Section 3 discusses the current state of and optimal path for sustainable finance taxonomies and climate-related risk disclosures to ensure that investors supply transition finance,including the need for agreed definitions of what is included and excluded and stronger governance through clear performance metrics.Section 4 looks at further steps to create an enabling environment for transition finance.This includes policies to incentivise investment in low-GHG-emitting technologies in hard-to-abate sectors,including carbon taxes,and measures to increase investor demand through easing asset discovery.CIFF WP4 Policy Brief:Transition finance for emerging economies 8 2 Supporting private transition finance Hard-to-abate sectors such as iron and steel,cement and petrochemicals are highly capital intensive,operated by large,listed corporations and trade in international markets.These sectors already access private finance.But this finance needs to be channelled into pro-transition investments.In emerging markets more finance needs to come via capital markets,particularly from international institutional investors.2.1 The landscape for private transition finance3 The majority of finance to hard-to-abate sectors is bank lending,estimated at$20 trillion globally.Of this,approximately 15%went to emerging economies,excluding China.This level of credit is substantive,and it is well-diversified across sectors.4 But,while available data does not clearly quantify its application,it is likely only a minority has been applied to pro-transition investments.Similarly,while green and sustainability-linked bonds only as been issued as transition 5 Between 2016 and 2022,approximately$250 billion was privately invested globally in new climate technologies,with 80%of this coming from private venture capital(Boston Consulting Group,2021).The majority of this is in advanced economies and more than 90%went to energy.By contrast,technologies relevant to hard-to-abate sectors received only 3%of this finance and the amount that went to emerging economies was negligible.Increasing the amount of finance and directing more of it into pro-transition investments and R&D will require addressing fundamental issues of weak private investor risk appetite for emerging markets6 3 Sources include the Bank for International Settlements statistical database,Climate Bond Initiative and annual reports of leading emerging market and international banks.4 For example,in India 40%of 2022 total bank credit(excluding personal loans)is to industry including construction(9%),metals(4%)and transport and storage(5%)(Ghosh et al.,2022;RBI,2022).5 Although it is much more clearly ring-fenced for pro-transition investments because of the taxonomy and governance standards which accompany these bonds.6 Reflecting this,since 2007 sovereign emerging market credit ratings have suffered a long-term decline.Between 2008 and 2021,Standard and Poors average credit rating for emerging markets fell from BB+to BB-.By 2021,out of the 54 emerging markets defined by S&P,only 18 had investment grade ratings and ratings for 31 were very poor(B or CC).CIFF WP4 Policy Brief:Transition finance for emerging economies 9 and the need for stronger incentives for bank lending to pro-transition investments.Achieving this is being made more difficult by possible future financial sector regulation.This might price in climate risks for carbon-intensive firms making finance scarcer and more costly for hard-to-abate sectors(Eren et al.,2020).This section discusses how adjusted regulatory frameworks,specialist instruments and policy directed finance could assist.In Section 4,the potential role of MDBs and DFIs is discussed.2.2 Adapting bank regulatory frameworks to discourage climate-risky lending Led by the Network for Greening the Financial System(NGFS),climate-related risks to regulated institutions and to financial stability are being assessed.New national regulatory frameworks are emerging focused on risk models,disclosures and taxonomies(NGFS,2023;ESRB,2023).There has been discussion on incorporating climate risks into regulatory capital frameworks.This would lead to higher risk weights for higher-emission sectors and countries or regions more exposed to climate risks which is to say,the majority of emerging economies and hard-to-abate sectors raising their cost of credit.Any regulatory reforms need to tread a fine line between discouraging business as usual investments in carbon-intensive equipment and increasing the cost of transition finance being applied to reduce hard-to-abate firms emissions.Capital adequacy requirements must therefore discriminate between potential stranded assets and transitional assets en route to decarbonisation(Tandon,2021;Menon,2022;ESRB,2023).Adjusting capital adequacy standards to reflect expected,rather than current,transition risks for hard-to-abate sectors would be one approach to direct lending away from investments that exacerbate climate risk.To be successful and avoid greenwashing,such adjustments need to be accompanied by strong accountability and transparency standards requiring companies to set credible plans and their progress in executing them(NGFS,2023).Similar frameworks are needed in capital markets.In 2022,the International Capital Market Authority and the Climate Bond Initiative separately issued guidance on the use-of-proceeds and expectations for transition plans.The CBI is also developing sector-specific standards for chemicals,cement and steel(ICMA,2022;CBI,2022a).There has been criticism that thresholds have been set too low to be effective(Haq and Doumbia,2022).More work is needed.CIFF WP4 Policy Brief:Transition finance for emerging economies 10 Transition finance could also be promoted via banks emission targets and disclosures processes to unlock credit for future emissions reductions.This would mean that banks are not disincentivised from avoiding transition finance entirely just to meet their own GHG emissions targets.2.3 Developing specialist instruments and funds Transition bonds issuance in capital markets and,globally,reached$7 billion as at December 2021.Most have been by sovereign governments,MDBs and DFIs.Better-rated emerging market sovereigns could also consider issuing transition bonds.Bonds with specialist ESG features would also be positive.For example,impact and green investors might have appetite especially where the bond is combined with social and poverty alleviation impact(IFC,2023).It will also be important to develop hedging instruments to enable investors to manage risks effectively at a portfolio level,including derivatives and insurance.2.4 Policy lending Some governments and central banks have mandates to provide or direct concessional financing to priority sectors.For example,in India banks are set minimum lending levels to priority sectors(Vaze et al.,2022),and in East Asia governments partnered with banks as part of industrial strategy partnerships with local industrial conglomerates(for example,Chang,2002)to increase the supply or reduce the cost of credit for specific sectors.Similar policy lending mandates could be issued to transition financing,particularly in countries where such policy lending is already established,or limits could be put on non-transitioning hard-to-abate activities.CIFF WP4 Policy Brief:Transition finance for emerging economies 11 3 Transition taxonomies and standards The expansion of international transition finance from advanced to emerging
