Valerio Micale

The Net Zero Finance Tracker is an interactive platform that provides a comprehensive assessment of the alignment of public and private finance with Paris Agreement goals. There are two dashboards within the platform, each providing a different perspective on progress:
I. Institutions
II. Real economy

This document outlines the methodological foundations of the platform. It is the result of a the top-down assessment of what Paris alignment and net zero represent, reviewed and… Show more

The Net Zero Finance Tracker is an interactive platform that provides a comprehensive assessment of the alignment of public and private finance with Paris Agreement goals. There are two dashboards within the platform, each providing a different perspective on progress:
I. Institutions
II. Real economy

This document outlines the methodological foundations of the platform. It is the result of a the top-down assessment of what Paris alignment and net zero represent, reviewed and refined in light of what currently available data and information allows us to say in terms of trends and progress.
As a first attempt, we consider it a “living” methodology. The idea is to continuously update and improve this methodology—in consultation with data providers and end users of the dashboard—as new data becomes available, and new concepts are developed, along with a better understanding of what Paris alignment means. Show less

A Proposed Method for Measuring Paris Alignment of New Investment outlines a science-based methodology for understanding how new investment tracks to IEA global warming scenarios and emissions budgets. This methodology attempts to arm policymakers and investors with a new methodology for understanding whether new investment is contributing sufficiently to 2030 targets under the Paris Agreement, within specific sectoral/geographical contexts.

Article 2.1c of the Paris Agreement calls for finance flows “[to be made] consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.” To meet this challenge, all financial actors (financial institutions and corporations) must align their practices, investments, and portfolios with climate goals, mitigate risks related to climate change, and seize opportunities for growth through climate-smart investment.

This paper breaks new ground for assessments… Show more

Article 2.1c of the Paris Agreement calls for finance flows “[to be made] consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.” To meet this challenge, all financial actors (financial institutions and corporations) must align their practices, investments, and portfolios with climate goals, mitigate risks related to climate change, and seize opportunities for growth through climate-smart investment.

This paper breaks new ground for assessments of Paris alignment, complementing existing approaches by examining the alignment of the most recent investment decisions rather than focusing exclusively on existing asset stocks. Such decisions directly drive deployment of new assets that will operate for decades to come alongside existing, “locked-in” assets.

Further development of this new-investment alignment approach is key to understanding the evolution of financing practices in response to climate objectives. Show less

Analysis of a standardized, digital index crop insurance platform for smallholder farmers that addresses
the impacts of climate change on crop production by making insurance more transparent,
efficient, and scalable

This report explores the current state of finance for climate adaptation and proposes practical, near term solutions to both fill in knowledge gaps and to increase investment. While many of the suggestions can also be applied in developed countries, which often face similar challenges in measuring and deploying adaptation finance, the focus of the report and selected examples highlight the role for developing country national governments and stakeholders, such as development finance… Show more

This report explores the current state of finance for climate adaptation and proposes practical, near term solutions to both fill in knowledge gaps and to increase investment. While many of the suggestions can also be applied in developed countries, which often face similar challenges in measuring and deploying adaptation finance, the focus of the report and selected examples highlight the role for developing country national governments and stakeholders, such as development finance institutions, local governments, and civil society organizations including academic institutions in supporting increased knowledge and investment in adaptation. The report benefits from discussions held during three adaptation finance focused workshops organized by CPI and adelphi in 2018 to present and discuss preliminary findings of this study. Show less

The combined challenges of energy access and climate change present major needs for clean energy investment. The Paris Agreement and United Nations’ Sustainable Development Goals, negotiated in 2015, represented an inflection point for moving from talk to action in order to address two of the world’s most important challenges. The objective is clear: mobilize investment to meet the goal of limiting global warming to, at most, 2 degrees Celsius while also bringing electricity to the more than 1… Show more

The combined challenges of energy access and climate change present major needs for clean energy investment. The Paris Agreement and United Nations’ Sustainable Development Goals, negotiated in 2015, represented an inflection point for moving from talk to action in order to address two of the world’s most important challenges. The objective is clear: mobilize investment to meet the goal of limiting global warming to, at most, 2 degrees Celsius while also bringing electricity to the more than 1 billion people globally who do not yet have access to it.

Within developing economies, there are significant opportunities to increase investment in clean energy: by 2030, non-OECD countries are projected to increase demand for electricity by 63 percent from 2014 levels (OECD, 2017a). This nearly 7,000 terawatt hours (TWh) of additional demand represents 85% of the expected global demand increase for that same time period (IEA, 2016).

Many developing economies already offer strong environments for investment. Countries including Mexico, Chile, Thailand, Peru, Malaysia, and China, among others, offer strong institutions and favorable policy environments, which are reflected in high sovereign investment-grade ratings.

This report looks at what is needed to unlock investment opportunities in developing economies that are still catching up. We evaluated, by geography and clean energy sector, the most significant opportunities for impact on both climate change and energy access per dollar invested; the risks and barriers that prevent investment; and how blended finance could be deployed to address investor needs. Show less

The ‘Understanding the Landscape’ report tracks and analyzes development finance flows on electricity and clean cooking access in key countries in Sub-Saharan Africa and Asia, which have significant energy access gaps.

As a growth equity fund, CRAFT will invest in 10-20 companies, located in both developed and developing countries, which have proven technologies and solutions for climate resilience and have demonstrated market demand and revenue. The Fund, together with an accompanying Technical Assistance Facility, will help companies – like weather analytics, catastrophe risk modeling services, and drought resilient seed companies, among others – expand into new sectors and geographic markets.

The Renewable Energy Scale-Up Facility (RESF) is a solution to drive private institutional equity into earlier stages of renewable energy projects in emerging markets. Proposed by Baker & McKenzie and Get2C, the Facility will deliver financing to projects in increments as they achieve key development milestones, in exchange for the option to buy equity at financial close, at better-than-market rate terms. The Facility’s innovative options financing mechanism gives investors a new tool for… Show more

The Renewable Energy Scale-Up Facility (RESF) is a solution to drive private institutional equity into earlier stages of renewable energy projects in emerging markets. Proposed by Baker & McKenzie and Get2C, the Facility will deliver financing to projects in increments as they achieve key development milestones, in exchange for the option to buy equity at financial close, at better-than-market rate terms. The Facility’s innovative options financing mechanism gives investors a new tool for managing risks more effectively. In addition, by aggregating and de-risking medium-scale solar and wind projects, RESF intends to address institutional investment requirements while channeling finance to build robust project pipelines. Show less

Energy efficiency has enormous potential to help achieve global climate objectives, but current investment levels fall far short of what is needed to stay within a 2°Celsius climate scenario. The IEA estimates that USD 13.5 trillion in cumulative investment will be required in energy efficiency by 2035, with USD 6 trillion for developing countries.

The funding gap is partly a result of the way in which energy efficiency is financed. Today’s energy efficiency investments are primarily… Show more

Energy efficiency has enormous potential to help achieve global climate objectives, but current investment levels fall far short of what is needed to stay within a 2°Celsius climate scenario. The IEA estimates that USD 13.5 trillion in cumulative investment will be required in energy efficiency by 2035, with USD 6 trillion for developing countries.

The funding gap is partly a result of the way in which energy efficiency is financed. Today’s energy efficiency investments are primarily self-financed by end users, making it difficult to scale the market without greater access to debt or equity (IEA, 2014). This is especially true in emerging economies.

The Energy Efficiency Enabling Initiative instrument aims to address these issues. Specifically, it will increase the supply of risk capital (equity) by involving new investors via an energy efficiency equity fund. The fund will have a specific investment mandate to source and support energy efficiency initiatives and will be backed by clear guidelines, investment eligibility criteria, and investment reporting.
The initiative will benefit from donor-backed concessional equity capital, which will enhance the risk profile of energy efficiency investments at the fund level by offering priority distributions to private investors. Depending on the geographies targeted, it may be complemented by a guarantee or other instruments to de-risk investments at the project level. Both features aim to mobilize and crowd-in private investors, including institutional investors – as equity partners in the fund, and/or as equity and debt providers in the project-level investments. Tailored technical assistance will also be provided to support the fund and energy efficiency market development. Show less

Geothermal energy has the potential to provide significant amounts of low-carbon, low-cost electricity in many developing countries. It is broadly cost competitive with fossil fuel alternatives across the world and is the cheapest source of available power in some developing countries with rapidly growing energy demand. It can also provide a clean, reliable and flexible power source that could directly replace coal or gas in the electricity mix and complement higher penetrations of other… Show more

Geothermal energy has the potential to provide significant amounts of low-carbon, low-cost electricity in many developing countries. It is broadly cost competitive with fossil fuel alternatives across the world and is the cheapest source of available power in some developing countries with rapidly growing energy demand. It can also provide a clean, reliable and flexible power source that could directly replace coal or gas in the electricity mix and complement higher penetrations of other, intermittent, renewable sources on the grid.
CPI has conducted analysis on behalf of the Climate Investment Funds with the aim of helping policymakers and development finance institutions understand which policy and financing tools to use in order to enable fast and cost-effective deployment of geothermal for electricity. The research involved high-level dialogues between public and private sector stakeholders to share findings and promote discussion, and three case studies on geothermal projects in Turkey, Kenya and Indonesia. Show less

There is growing evidence that risk mitigation instruments provided by public financial institutions can help to reduce financing costs and mobilize private capital in financing infrastructure. However, these instruments still remain underutilized, especially for climate-related investment. Our analysis has shown the effectiveness of these tools in supporting low-carbon projects in high-risk environments but has also identified challenges to scaling-up their use. To better understand how these… Show more

There is growing evidence that risk mitigation instruments provided by public financial institutions can help to reduce financing costs and mobilize private capital in financing infrastructure. However, these instruments still remain underutilized, especially for climate-related investment. Our analysis has shown the effectiveness of these tools in supporting low-carbon projects in high-risk environments but has also identified challenges to scaling-up their use. To better understand how these instruments work individually and in combination, we have analysed in detail the financial structure of a large scale low-carbon project in a high-risk environment. The project chosen, the 250MW Bujagali Hydropower Project in Uganda, was able to raise close to $300 million in commercial loans and private equity, an unprecedented amount of private finance in a low-income country, and mobilized a higher level of private investment than in any other comparable hydro-project in the region. Show less

Investments in energy efficiency by small and medium enterprises are mostly self-financed and limited to small investments with very short payback periods, such as lighting upgrades, rather than more capital intensive measures. This is due to:
• The lack of technical capacity to evaluate energy efficiency investments
• Small and medium enterprises’ lack of focus on these investments
• The market’s lack of trust that energy savings will materialize
• Limited access to financing… Show more

Investments in energy efficiency by small and medium enterprises are mostly self-financed and limited to small investments with very short payback periods, such as lighting upgrades, rather than more capital intensive measures. This is due to:
• The lack of technical capacity to evaluate energy efficiency investments
• Small and medium enterprises’ lack of focus on these investments
• The market’s lack of trust that energy savings will materialize
• Limited access to financing in many developing countries, where banks are reluctant to lend given the high perceived risks and the scarce information on the performance and track record of energy efficiency investments.
The Energy Savings Insurance (ESI) instrument aims to stimulate investments in energy efficiency by mitigating the risk that small and medium enterprise’s investments do not pay for themselves if actual energy savings end up being lower than anticipated. The Energy Savings Insurance is accompanied by a package of complementary measures that address technical capacity, access to capital, and other barriers to investment in energy efficiency.
This report outlines progress made during Phase 3 on the design and pilot underway in the agro-industry sector in Mexico in 2015, where an expected 10 projects will be selected to test the instrument initially, and plans for the instrument to then be extended to the entire sector.
Show less

This case study looks at Olkaria III, the first privately funded and developed geothermal project in Africa to understand how the Kenyan government and international public finance are working together to attract private investment in geothermal.

Small and medium enterprises’ (SMEs) investments in energy efficiency (EE) are mostly limited to those with very short payback periods, such as lighting upgrades, rather than more capital intensive measures. The Energy Savings Insurance (ESI) instrument aims to scale up SMEs’ EE investment by providing a package of measures that boost investor confidence in the financial viability of EE investments. The core of the package is a new insurance product to cover energy savings for specifically… Show more

Small and medium enterprises’ (SMEs) investments in energy efficiency (EE) are mostly limited to those with very short payback periods, such as lighting upgrades, rather than more capital intensive measures. The Energy Savings Insurance (ESI) instrument aims to scale up SMEs’ EE investment by providing a package of measures that boost investor confidence in the financial viability of EE investments. The core of the package is a new insurance product to cover energy savings for specifically defined and verifiable EE measures in targeted developing countries. In many cases, including in the initial pilot planned for Mexico, the insurance would be accompanied by additional interventions to mobilize investors, energy service providers, and financiers. Show less

Geothermal energy is broadly cost competitive with fossil fuel alternatives even without a carbon price. The levelized cost of geothermal electricity is around 9-13 USDc/kWh, making it one of the cheapest renewable energy options available. Its ability to provide low-cost, low-carbon power reliably and flexibly means is well-placed among to meet developing countries growing energy needs while displacing polluting fossil fuel power plants.
However, its rate of deployment has been slower than… Show more

Geothermal energy is broadly cost competitive with fossil fuel alternatives even without a carbon price. The levelized cost of geothermal electricity is around 9-13 USDc/kWh, making it one of the cheapest renewable energy options available. Its ability to provide low-cost, low-carbon power reliably and flexibly means is well-placed among to meet developing countries growing energy needs while displacing polluting fossil fuel power plants.
However, its rate of deployment has been slower than other renewables over the last thirty years and will need to speed up rapidly if this technology is to deliver on its promise. In addition, geothermal technologies that can harness lower temperature geothermal resources need to achieve more deployment to bring costs down.
This report is part of a project carried out by Climate Policy Initiative (CPI) for the Climate Investment Funds (CIFs) which will focus on the effective use of public finance to scale up geothermal deployment in developing countries. Show less

Governments around the world have already used energy performance contracts (EPCs) with energy service companies (ESCOs) to reduce the energy costs and carbon emissions of public buildings without any budget outlay on their part. This brief studies the first program of this kind in Italy to cover energy savings alone and introduce pure EPC on a regional scale, drawing early lessons on how to drive action on energy efficiency in new contexts.

The Global Landscape of Climate Finance 2013 finds that global climate finance flows have plateaued at USD 359 billion, or around USD 1 billion per day – far below even the most conservative estimates of investment needs. Landscape 2013 confirms that public policies, resources, and money are the ‘engine room’ of the climate finance system. We offer the following findings as action points for policymakers:
1. Develop well-articulated domestic enabling environments to encourage further private… Show more

The Global Landscape of Climate Finance 2013 finds that global climate finance flows have plateaued at USD 359 billion, or around USD 1 billion per day – far below even the most conservative estimates of investment needs. Landscape 2013 confirms that public policies, resources, and money are the ‘engine room’ of the climate finance system. We offer the following findings as action points for policymakers:
1. Develop well-articulated domestic enabling environments to encourage further private investment.
2. Recognize that private actors prefer familiar policy environments where the perception of risk is lower.
3. Continue to invest in, and ensure effective use of, international public resources, which play a critical role in facilitating low-carbon and climate-resilient investments, particularly in developing countries.
4. Encourage demand for and assess the effectiveness of financing instruments offered by domestic and international public intermediaries such as Multilateral, Bilateral, and National Finance Institutions.
5. Address risk, which lies at the heart of private investment decisions. There is potential for government-backed sponsors to scale up the provision of new and improved risk mechanisms.
6. Close important knowledge gaps that continue to impede our ability to track or evaluate climate finance flows. Show less

The World Bank Group is a major provider of risk mitigation instruments ranging from insurance policies and guarantees aimed at improving creditworthiness of projects, to contract-based instruments targeting the volatility of commodities and currencies. In this study, CPI provides an overview of general risk coverage offered through its various member institutions, potential gaps compared to existing demand, and trends of risk coverage commitments for climate change.

We conclude that, at… Show more

The World Bank Group is a major provider of risk mitigation instruments ranging from insurance policies and guarantees aimed at improving creditworthiness of projects, to contract-based instruments targeting the volatility of commodities and currencies. In this study, CPI provides an overview of general risk coverage offered through its various member institutions, potential gaps compared to existing demand, and trends of risk coverage commitments for climate change.

We conclude that, at least in theory, the WBG provides coverage against most risk categories, particularly those faced by private debt investors. Yet, despite its increasing commitment to addressing climate change – translated into an increased supply of risk mitigation instruments – few risk instruments appear to have been used at a significant scale to support climate related projects. We identify options that could improve this situation. First, a specific mandate for the WBG to broaden the use of its risk mitigation instruments for climate change could significantly increase their availability to and use by climate investors. Support could also enhance uptake of two specific kinds of instruments with significant potential for climate related projects: guarantees and index-based instruments. Show less

National budgets tighten, policies change, carbon prices fluctuate, and international financial mechanisms stutter. In each case, risk perceptions mount and the task of encouraging private sector investment in climate change related infrastructure becomes more difficult, and potentially more costly.

Policymakers, who are responsible for encouraging this investment and making sure that it is reasonably priced, may feel that the task is beyond their control; after all, in many cases the… Show more

National budgets tighten, policies change, carbon prices fluctuate, and international financial mechanisms stutter. In each case, risk perceptions mount and the task of encouraging private sector investment in climate change related infrastructure becomes more difficult, and potentially more costly.

Policymakers, who are responsible for encouraging this investment and making sure that it is reasonably priced, may feel that the task is beyond their control; after all, in many cases the cost of raising finance appears to be controlled by the market and its laws of supply and demand. But what drives the supply and demand for finance, is risk; and one thing that policymakers can cause, control, alleviate, or help mitigate, is risk.

Risk — whether real or perceived — is the single most important factor preventing projects from finding financial investors, or raising the returns that these investors demand. Risk and risk perceptions vary significantly from project to project, technology to technology, industry to industry, and country to country. Since higher financial returns are required to cover higher risks, the variation between project risks explains much of the difference in financing costs. Green investments typically suffer higher risk perceptions due to a dependence on public policy and, often, the relative immaturity of technologies, markets, and industries. Show less

As other risk mitigation instruments become available to investors, we will continue to apply and refine this analytical framework in order to highlight which elements are integral to a particular instrument’s effectiveness, which issues are likely to challenge their implementation, and to understand whether these new instruments could themselves create additional risks.

In the wake of the global financial crisis, traditional sources of finance for large-scale, emissions reduction assets (i.e. project developers, banks, and public budgets) are facing very high capital constraints. At the same time, the need for capital for low-carbon infrastructure has grown significantly. The International Energy Agency estimates that halving carbon dioxide emissions by 2050 would call for approximately USD 36 trillion to fund infrastructure investments for energy generation… Show more

In the wake of the global financial crisis, traditional sources of finance for large-scale, emissions reduction assets (i.e. project developers, banks, and public budgets) are facing very high capital constraints. At the same time, the need for capital for low-carbon infrastructure has grown significantly. The International Energy Agency estimates that halving carbon dioxide emissions by 2050 would call for approximately USD 36 trillion to fund infrastructure investments for energy generation and use alone, above a business-as-usual scenario (IEA, 2012).

The gap between what is getting funded and what is needed will widen under today’s market conditions and as new financial regulations are enforced (in particular, Basel III and Solvency II). In order to unlock green finance, instruments are needed to: (1) render investments attractive to previously untapped sources of finance — such as institutional investors2 — and (2) free up resources for traditional sources of climate finance, particularly, those on banks’ balance sheets.

First-loss protection instruments support both these goals by shielding investors from a pre-defined amount of financial losses, thus enhancing credit worthiness, and improving the financial profile of an investment. Show less

Investors weigh a variety of factors when they make choices. One of these factors concerns how risky an investment is. While risk can come in many forms, one form that seems to be of utmost relevance for renewable energy and clean technology investments is policy risk. Policy risk, or regulatory risk, concerns the risk that unexpected changes to government regulations and policies will change the investment environment.

Traditionally, policy risk has been managed by investors with their… Show more

Investors weigh a variety of factors when they make choices. One of these factors concerns how risky an investment is. While risk can come in many forms, one form that seems to be of utmost relevance for renewable energy and clean technology investments is policy risk. Policy risk, or regulatory risk, concerns the risk that unexpected changes to government regulations and policies will change the investment environment.

Traditionally, policy risk has been managed by investors with their own internal resources or partially covered under traditional political risk insurance products. However, recent unprecedented retroactive cuts and amendments to public policies such as Feed-in-Tariffs (FiTs) have significantly increased perception of policy risk and dented investors’ confidence in the renewable energy sector. The fact that demand for policy risk coverage is, so far, only partially met, suggests that conventional practices may no longer be adequate to mitigate this risk and new mitigation instruments are needed.

In this paper, we highlight elements integral to the effectiveness of instruments which seek to address policy risk, paying special attention to issues likely to challenge their implementation, and we try to understand whether new instruments could themselves create additional risks. Show less

As national responses to climate change evolve and strengthen, so too must the systems for tracking greenhouse gas (GHG) emissions, mitigation actions, and progress toward goals. This evolution is shaped by multiple drivers: new international agreements, shifting political and social pressures, and specific policy reforms at the national and local level. Demands on existing measurement, reporting, and verification (MRV) systems for emissions and mitigation actions will increase and give rise to… Show more

As national responses to climate change evolve and strengthen, so too must the systems for tracking greenhouse gas (GHG) emissions, mitigation actions, and progress toward goals. This evolution is shaped by multiple drivers: new international agreements, shifting political and social pressures, and specific policy reforms at the national and local level. Demands on existing measurement, reporting, and verification (MRV) systems for emissions and mitigation actions will increase and give rise to new systems.

This report identifies emerging MRV needs for four of the major emitters — China, Germany, Italy, and the United States — and assesses how well-positioned each country is to meet those needs.1 It builds on previous CPI working papers that described and assessed how effectively existing systems used to track emissions and mitigation actions in these four countries are serving the current needs of policymakers and stakeholders.2 Through this new assessment, we look to the future. We identify where countries are well-placed to meet emerging MRV needs, and where countries require further development and capacity building now in order to keep systems functioning effectively in coming years.

Emerging needs
Looking across specific international and domestic policy processes, and considering broader policymaker, stakeholder, and public demands, Table 1 summarizes emerging MRV needs.
Show less

This paper is one of a series – prepared by Climate Policy Initiative for the San Giorgio Group – examining the use of public money to catalyze and incentivize private investment into low carbon technologies and draw lessons for scaling-up green, low-emissions funding. The San Giorgio Group case studies seek to provide real-world examples of what works and what does not in using public money to spur low carbon growth. Through these case studies CPI describes and analyzes the types of mechanisms… Show more

This paper is one of a series – prepared by Climate Policy Initiative for the San Giorgio Group – examining the use of public money to catalyze and incentivize private investment into low carbon technologies and draw lessons for scaling-up green, low-emissions funding. The San Giorgio Group case studies seek to provide real-world examples of what works and what does not in using public money to spur low carbon growth. Through these case studies CPI describes and analyzes the types of mechanisms employed by the public sector to deal with the risks and barriers that impede investment, establish supporting policy and institutional development and address capacity constraints.

Program Solaire (Prosol) is an incentive program that promotes residential solar water heaters in Tunisia. In the early 2000s, the deployment of solar water heaters remained low due to fossil fuel subsidies. The Tunisian government had attempted to discontinue the fossil fuel subsidies, but a public outcry caused policymakers to abandon this course of action. Prosol sought other strategies to increase installations of solar water heaters, and succeeded in increasing installations fivefold. Importantly, the Prosol program is paying for itself; avoided fossil fuel subsidies are more than covering government support for solar water heaters. Show less

“Corporate Environmental Sustainability” has become a widely used term. It implies that an individual firm has the capacity to effectively manage and control the harm inflicted upon the natural environment by its processes, products and business models – a notion we refer to as an organization’s “manageability of environmental impact”. This paper argues that the organization-level concept of corporate sustainability cannot be meaningfully discussed unless it is understood in light of three… Show more

“Corporate Environmental Sustainability” has become a widely used term. It implies that an individual firm has the capacity to effectively manage and control the harm inflicted upon the natural environment by its processes, products and business models – a notion we refer to as an organization’s “manageability of environmental impact”. This paper argues that the organization-level concept of corporate sustainability cannot be meaningfully discussed unless it is understood in light of three conditions: market growth dynamics, ecosystems complexity, and supply chain structure. These economic, ecological and industry-organizational conditions outside the organization’s boundaries severely limit an organization’s manageability of its environmental impact, suggesting that the cheerfully optimistic connotations of the concept “corporate sustainability” must be tempered accordingly. Using market growth rates and environmental impact manageability, we develop four scenarios to further illustrate the dynamics and challenges to sustainability in each setting, and derive implications for management research and practice. Show less

Since the early nineties, the term "sustainable consumption and production" (SCP) has defined the goal of policy-makers and scholars striving to solve the problems of sustainable development. However, despite the consistent and wide-ranging efforts of governments and business in response to the research, global environmental pollution and the degradation of ecosystems have increased over the years. The goal of this paper is twofold. First, a critical review of SCP is provided, analyzing the… Show more

Since the early nineties, the term "sustainable consumption and production" (SCP) has defined the goal of policy-makers and scholars striving to solve the problems of sustainable development. However, despite the consistent and wide-ranging efforts of governments and business in response to the research, global environmental pollution and the degradation of ecosystems have increased over the years. The goal of this paper is twofold. First, a critical review of SCP is provided, analyzing the evolution of the concept, and examining the main causes of environmental damage linking SCP and the IPAT equation. In particular, the authors initially focus on the strategies toward sustainable production and the role played by technology. This outcome is then tested against the dynamics of consumption and the measures implemented to modify consumption at business and government level. Second, a theoretical framework is introduced that helps in stylizing current societal models on the basis of their consumption and production patterns. Show less

The purpose of this paper is to describe the emerging opportunities offered by a low-carbon economy, with particular reference to the CO2 markets. After a short review of the current state of international climate change diplomacy, the article focuses on CO2 emission trading, analyzing both the markets related to compliance obligations under the Kyoto Protocol, and the markets that have been organized around voluntary emissions trading. The article then examines the business opportunities… Show more

The purpose of this paper is to describe the emerging opportunities offered by a low-carbon economy, with particular reference to the CO2 markets. After a short review of the current state of international climate change diplomacy, the article focuses on CO2 emission trading, analyzing both the markets related to compliance obligations under the Kyoto Protocol, and the markets that have been organized around voluntary emissions trading. The article then examines the business opportunities related to this new industry and new value chains being formed around the mitigation of climate change. We conclude discussing the advisability of this new system as an instrument for mitigating greenhouse gas emission Show less