Will the private sector pay the climate bill?

In a time where Western governments struggle to keep their national budgets above the red lines, increased allocations for climate finance are not popular.


There is a global agreement to increase annual climate finance up to the USD100 billion by 2020. Acknowledging this target, governments have started to look for alternative sources, and there is an increasing hope that private finance is the answer.

No silver bullet

In the paper “Will the private sector pay the climate bill” DanChurchAid analyzes the potential of private finance in relation to the 100 billion USD target. The conclusions indicate that private finance may not be the perfect solution Western governments are hoping for.
Co-author Mattias Söderberg says:
"Private finance is no silver bullet. While it may have some good potential for specific sectors and countries, the least developed countries, as well as adaptation, as one of the main activities related to climate change, are less likely to benefit from private finance”.

Need for framework for private finance

The paper ends with a number of recommendations, on how to create a framework for private finance. Mattias Söderberg says:
“There is an enormous need for climate finance and clearly the debate on private finance is important. However, it is equally important to agree on the framework for how to engage the private sector. Otherwise we may up spending a lot of public funds on initiatives which have no real effect on the challenges faced by developing countries.”
Read also the article by Mattias Söderberg:”Private climate finance: a silver bullet, or an empty bucket?” in HOTSPOT NEWSLETTER Nº 64