Financing the Green Transformation — Market Failures, Government Failures and the Role of the State
Green investments are obstructed by a combination of both market and government failures. These failures prevent the allocation of capital into green investments to a socially optimal degree. However, although government failures cannot be ruled out per se, most experts would agree that the public sector ought to play a vital role in catalysing and leveraging green investments. This chapter introduces these failures and establishes the rationale for public intervention. Subsequently it defines a set of criteria that should guide public intervention and discusses different instruments to overcome the failures.
KeywordsFinancial Institution Market Failure International Energy Agency Green Investment International Energy Agency
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