‘Climate Investment Traps’, Macro-Risks and Conducive Investment Environments in developing countries
Currently, climate finance is directed predominantly toward larger, fast-growing developing nations, while low-income and vulnerable countries remain underserved due to high risk levels, limited investment suitability, and path dependency effects. This talk will address the unique investment challenges faced by developing economies, focusing on the complex landscape of macro risks that shape the investment environment for mitigation projects. It will highlight critical risk factors that define an “investible space” and examine how these risks – both individually and in combination – impact investment viability. The discussion will further investigate how macro risks, such as foreign exchange volatility, interest rate fluctuations, and sovereign credit risks, interact to create complex, non-linear effects on investment decisions. For example, elevated levels of one type of such risk may be manageable only if other risks, such as those related to political stability or economic cycles, are kept relatively low. Thus, designing effective de-risking strategies demands a nuanced understanding of these risk interactions to develop more efficient, cost-effective solutions that can foster a broader, more equitable distribution of climate finance.
Date: 4 November 2024, 14:15 (Monday, 4th week, Michaelmas 2024)
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: Seminar Room C
Speaker: Nadia Ameli (University College London)
Organising department: Department of Economics
Part of: Environment and Resource Economics Seminar
Booking required?: Not required
Audience: Members of the University only
Editor: Edward Clark