Landscape of Domestic Climate Finance
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Landscape of domestic climate finance Low-carbon investment 2011 - 2017 Hadrien Hainaut | Ian Cochran | Lola Gouiffes | Jason Deschamps | Alice Robinet Climate-KIC is supported by the EIT, a body of the European Union I4CE – Institute for Climate Economics is a think tank that provides public and private decision-makers with expertise on economic and financial issues related to the energy and ecological transition. We strive to implement the Paris Agreement, and make global financial flows compatible with low-carbon development that is resilient to climate change. I4CE is an initiative of Caisse des Dépôts and Agence Française de Développement and is also supported by the ADEME and Morocco’s Caisse de Dépôts et Gestion. The National Agency for Environment and Energy Management (ADEME) supported the realization of the last three editions of the Landscape of climate finance in 2017, 2016, and 2015 (grants number 1510C0043, 1610C0014 and 1710C0009). The Energy and Climate Division of the Ministry for an Ecological and Solidary Transition (MTES, DGEC) has supported the 2015 and 2016 editions of the Landscape (grants number 2101698172 and 2101900381). The project has received support from the Climate KIC funded by the European Institute of Innovation and Technology (EIT). The content in this report was partially funded by an initial Ideator grant (APDMOO23) and through the European Financial Centres for Green and Sustainable Finance project. This research project was carried out independently by I4CE. The content of this report does not commit the partner organizations of I4CE nor the partner organizations of the Landscape of climate finance project. Please quote this study as: H. Hainaut, I. Cochran, L. Gouiffes, J. Deschamps, A. Robinet - Landscape of climate finance in France, low-carbon investment 2011- 2017 - September 2018, I4CE – Institute for Climate Economics This study is available at: https://www.i4ce.org/go_project/landscape-of-domesticclimate-finance/ landscape-climate-finance-france/ This report includes acronyms and translations for the names of some French institutions, instruments and programs. In their first occurrence in the report, acronyms are presented in their extended form, and translations are provided with their French equivalent in brackets. Acknowledgements The authors wish to thank the following for their cooperation and valued contribution : • Aïda Diallo (MTES, DGEC) • Anne Bringault (CLER) • Andreas Barkman (EEA) • Ariane Rozo (ADEME) • Benoist Vercherin (Climate-KIC) • Catherie Herrero (UIC) • Claire Schreiber (Club des villes cyclables) • Cristina Wallez Cuevas (CGET) • Estelle Brevelet (ADEME) • Françoise Réfabert (Vesta Conseil) • Gaël Callonec (ADEME) • Jonathan Hess (MTES, DGEC) • Julia Jordan (CGET) • Julien Brunel (SNCF Réseau) • Marie Castelli (AVERE France) • Meike Finke (Réseau Action Climat) • Ninot Ramialinarivo (ADEME) • Olivier de Guibert (MTES, DGEC) • Rémi Coinault (CGET) • Thierry Lethuillier (BPI France) • Thomas Saleh (BPI France) • Thomas Sanchez (Caisse des Dépôts) • Vincent Dameron (MAAF) The presentation of the results of the study at the National Assembly in December 2017 was hosted by MP Matthieu Orphelin and parliamentary attaché Eléonore Cartillier. Landscape of domestic climate finance - Lessons from five years of application in France I• 4CE | 1 Foreword: five years of improving knowledge on climate finance for policy Achieving the objectives laid out in the Paris Agreement investment and related financing flows is a powerful to keep the increase in global mean temperature “well process for supporting national climate and energy policy. below 2°C” will require significant changes in how our • First, highlighting the gap between current policies and societies and economies function. The transition to a climate objectives can help generate awareness and low-carbon, resilient economic model implies significant engagement with national stakeholders. investments in buildings, transport systems, vehicles, • Second, aggregating indicators from different sectors power plants and many other parts of the infrastructure into a single, coherent view serves as a reference point that supports the economy – and our daily lives. In turn, to track where the transition stands year after year. the transition will also require changes in investments with climate-adverse effects (fossil fuels or energy- • Finally, sectoral analysis of the economic conditions intensive technologies) that must be reduced and funds in which low-carbon projects can thrive improves the redirected to finance what we truly need for our future. understanding of investment policy successes and setbacks. An improved knowledge base The results produced by I4CE using this approach have become an internationally-recognized reference on and policy assessments tools climate finance and investment in France. Since 2013, for shifting investments I4CE is continually improving and extending this approach to co-construct with both public and private stakeholders I4CE is convinced that an important means of making the tools and information needed to inform decision- these investment happen is having the correct signals makers and supporting public policies on the elaboration to the economy to invest in a low-carbon, resilient of financing strategies for the energy transition. We are manner – as well as ensure that finance is flowing from currently extending this methodology to assess current both public and private sources. However, shifting and climate-adverse investments, as well as produce forward- scaling-up financial flows to meet national climate and looking assessments of the investment needs of French energy objectives requires an improved knowledge base, National Climate Strategy (SNBC and PPE). as well as policy and project assessment tools for shifting domestic investment patterns and to engage financial and economic actors. A report to learn about French climate policy through climate A “Landscape of climate finance” finance tracking to track investments and support On one hand, this report has been designed for those decision making that would like to learn more about climate policy and investments in France. The report presents an Landscapes of domestic climate finance are overview of French climate policy over the last decade, comprehensive studies mapping financial flows dedicated complemented with descriptions of the principal policies to climate change action and the energy transition. and approaches taken sector by sector. It presents the Covering both end-investment and supporting financial process around the SNBC & PPE, and an overview of the flows from public and private stakeholders, Landscapes related investment needs. I4CE’s experience in using the capture how the financial value chain links sources, Landscape tool to support these discussions is explored, intermediaries, project managers and end-investment. with the Results and Analysis chapters demonstrating The resulting systematic tracking of domestic climate what type of information the Landscape can generate, 2 | I4CE • September 2018 FOREWORD: FIVE YEARS OF IMPROVING KNOWLEDGE ON CLIMATE FINANCE FOR POLICY ICY L Hadrien Hainaut, Project Manager OR PO F NCE A IN F TE A IM L EDGE ON C L IMPROVING KNOW IMPROVING F Ian Cochran, Senior Advisor RS O A IVE YE and how this can provide insights for decision makers. well as the UNEP Inquiry into the Design of a Sustainable F On the other hand, it presents a deep-dive into the roots of Financial System. While a number of countries to date have produced domestic landscapes, knowledge on the Landscape of domestic climate finance methodology. domestic climate-related end investment, financial flows This includes an overview of the definitions used, the supporting this investment by public and private actors FOREWORD: hypothesis developed to estimate end-investment and remains limited across the European Union and beyond. financing flows, and an exhaustive listing of the sources of data collected and aggregated by I4CE. Our objective We hope that this report will help those who know our is to provide a basis for constructive discussions on work to better understand it – and to support, if not inspire, other researchers across Europe and around the world to means to improve our approach, as well as support any produce this type of analysis in their given countries. actors who may wish to develop a Landscape in their country or area of interest. We invite all interested parties to get in contact us and look forward to working with you to achieve our shared climate objectives. An open invitation to work with us to improve knowledge for policy Best regards, Today, there is an opportunity to improve domestic tracking of climate finance in Europe and the world. Landscapes have been recognized as an important part of understanding the impacts of the broader ‘greening’ of Ian & Hadrien the financial system on the real economy by both the High Level Expert Group on Sustainable Finance in Europe as Landscape of domestic climate finance - Lessons from five years of application in France I• 4CE | 3 LANDSCAPE CONTENTS 2017 EDITION RESULTS SUMMARY 6 PART 1 INTRODUCTION 10 PART 2 METHODOLOGY FOR DOMESTIC CLIMATE FINANCE TRACKING 16 PART 3 CLIMATE INVESTMENT REACHED €31.7 BILLION IN 2016 IN FRANCE 28 Buildings 35 Transports 53 Agriculture 66 Industry 72 Centralised energy production and networks 79 PART 4 ANALYSIS AND DISCUSSION 92 Climate investment is stable overall, but shows contrasting trends between areas 92 Analysing