Why flexible green funding is essential for transition assets

Central and eastern Europe, the EBRD’s region, has some of the highest carbon emission rates in the world, due partly to its carbon-heavy industries. Such a dependence on these industries means a transition to a zero-carbon economy will take time.

If the financial markets are to fulfil their potential in helping to meet the Paris Agreement’s aim of containing the rise in global temperatures to well below 2 degrees Celsius compared to pre-industrial levels, then the sustainable funding markets would be well advised to focus on the importance of transitioning dirty assets. As these sectors will be the hardest, and costliest, to decarbonise, finance needs to be deployed with specific incentives for them to cut carbon.

This is an abridged summary of an article published in The Banker on September 23, 2021.