Wednesday 20 November 2019 12:01 am | Updated: Tuesday 19 November 2019 6:24 pm

Green infrastructure funding ‘must be unlocked’ to meet climate change targets

Cruas nuclear power plant is pictured, on November 12, 2019, after an earthquake with a magnitude of 5.4 hit the area. - An unusually strong earthquake hit southeastern France on November 11, 2019, injuring four people, one of them seriously, authorities said. The quake, with a magnitude of 5.4, was felt in a vast area between the cities of Lyon and Montelimar which are about 150 kilometres (93 miles) apart, the national seismological office said. (Photo by JEFF PACHOUD / AFP) (Photo by JEFF PACHOUD/AFP via Getty Images)

The global infrastructure system is in need of an “unprecedented” overhaul if governments are to meet global climate change targets, a new report has warned.

Research by TheCityUK and Imperial College Business School today revealed that current investment in low-carbon infrastructure is well below the required level.

In the UK, investment in making the energy sector more environmentally friendly needs to double from an average of £10bn to £20bn annually if it is to reach the government’s aim of net zero carbon emissions by 2050, according to the Committee on Climate Change.

Globally, an additional $1.1 trillion (£851bn) is needed each year between now and 2040 to meet the International Energy Agency’s green energy target.

But the report warned there were a string of significant barriers to increasing green investment from the private sector, including political risk, regulatory hurdles, currency concerns and poor data.

Government policy and market-driven incentives will be key to removing these barriers, it stated.

“Climate change has risen rapidly up political, regulatory and investor agendas, but persistent barriers are preventing the scale of investment that is so urgently needed,” said Anjalika Bardalai, chief economist and head of research at TheCityUK.

“Markets have a key role to play in addressing this challenge by financing the unprecedented transformation of the global infrastructure system towards clean, resilient and environmentally sustainable economic growth.

She added: “Governments, regulators and industry must work together to unlock the huge amounts of money necessary to meet the unparalleled challenge of climate change.”

One of the report’s key recommendations was a new, standardised definition of so-called low-carbon or green infrastructure, alongside better benchmarking and transparency for investors.

Raffaele Della Croce, senior fellow at Imperial’s Centre for Climate Finance and Investment, said: “Meeting the Paris Agreement targets means aligning short-term infrastructure investment plans with long-term, low emission, climate-resilient development strategies.

“This will require a step-change in policy focus, new financing solutions, and faster technological progress.”

Main image credit: Getty