3rd Annual OECD Green Investment and Financing Forum

1. Local Green Finance
Boos%ng Local Industry and Enhancing Local
Fiscal Capacity for Achieving SDGs through
Green Finance
3rd OECD Green Investment Financing Forum
13-14 October 2016
Dr. Ho-seok KIM

2. Green Finance
• Mobilising public and private investment in mi%ga%on and
adapta%on ac%vi%es
– Provision of more int’l public finance to support developing
countries, and more domes%c public and private finance to
implement climate-compa%ble development
• Enhancing the effec%veness and efficiency of public finance
by the collabora%on between climate funds
– Maximizing synergies between climate funds
• Establishing innova%ve financing mechanisms, (including
carbon and non-carbon market) to enhance green finance
and aYract private investment
– Such as, green bonds, de-risking instruments, carbon pricing
approaches

3. Green Finance (con’d)
Structure
Global
• Climate change
• Global
abatement cost
Host
country
• Technology
transfer
• Energy access
Investor
country
• Mi%ga%on cost
• Compe%%veness
Changes
• Scaling up adapta%on
financing
è To improve the capacity of
local government. “All
adapta%on is local”
• Suppor%ng climate-smart
development
è To enhance synergies between
climate and development
finance
• Implemen%ng the 2030
Agenda
è To consider and address inter-
linkages among the SDGs
Global benefits
Na-onal
benefits
• Climate finance
(“New and
Addi%onal”)
• Development
finance
• Carbon markets
• Private sector

4. Green Finance and Development Co-
benefits
Public mi7ga7on finance by
sector (2014, in B USD)
From: CPI (2015)
Climate-related Development
Finance
From: OECD (2015)
From: IIED (2015)

5. Interlinkages with other SDGs
Source: ICSU ISSC (2015)

6. SMEs and Local Economic
Development
• SMEs play an important role, par%cularly in developing
countries.
– SMEs account for about 90% of businesses and half of
employment.
– SMEs are key providers of employment and key engines of
economics growth.
• SMEs are the backbone of the local economy, and key
to local economic development.
• But more than 50% of SMEs lack access to finance.
– It is necessary to broaden the range of financing
instruments available to SMEs, so as to enable them to
con%nue to play their role in growth and employment in
the local economy.

7. Climate Change and SMEs
• Business and industry are exposed to the risks of
climate change.
– SMEs, especially those in developing countries, oden
lack the necessary resources and capacity to build
resilience to climate risks.
• SME compe%%veness is also exposed to
regulatory risks related to GHG emissions.
– SMEs lack the resources to improve their
environmental performance to meet regulatory
requirements associated with GHG emissions.

8. Local Green Finance
• Suppor%ng sustainable development of local
communi%es in an explicit and measurable
way.
• Enhancing local industry’s compe%%veness
– (Directly) By addressing climate change risk and
GHG-related regulatory risk
– (Indirectly) By (jointly) providing necessary
infrastructure for local economic development

9. Local Green Finance and SME Finance
New Financing
Instruments
Eg. HIT
Unlocking SME
Finance
Local Industry
(SMEs)
Developmental
Benefits
Climate and
Development
Finance
Sustainable
Development
Economic Growth
Employment
© Hoseok Kim 2016
Produc%vity

10. THANK YOU
END