Mobilizing the private sector for climate finance.

Summary:

Ex post financial support based on verified emissions reductions provided by project developers bidding to sell their credits via one of three potential Quantity Performance Instruments (QPIs): direct purchase by the public fund; sold to a market with additional funding provided by the public fund to guarantee a minimum sales price (“top-up”); or the purchase of a tradable put option provided by the public fund, which allows project developers the right to sell verified emissions reductions later at an agreed-upon price.

Full text: “Mobilizing the Private Sector: Quantity-Performance Instruments for Public Climate Funds”

Citation:
Ghosh, Arunabha, Benito Müller, William Pizer, and Gernot Wagner. “Mobilizing the Private Sector: Quantity-Performance Instruments for Public Climate Funds.” Oxford Institute for Energy Studies (Oxford Energy and Environment Brief, 2012).

Related:
Bodnar, Paul, Caroline Ott, Rupert Edwards, Stephan Hoch, Emily F. McGlynn & Gernot Wagner. “Underwriting 1.5°C: competitive approaches to financing accelerated climate change mitigation.” Climate Policy 26(1): 79-82 (2018),

Post-script (March 24, 2016):
A version of this idea has since been implemented in form of the Pilot Auction Facility for Methane and Climate Change Mitigation (PAF), which has been awarded Environmental Finance’s Carbon Deal of the Year 2016. The story, via the World Bank.