Increasing the Quality of Investments for Deep Decarbonization

The Energy Futures Finance Forum (EF³ ) offers policy recommendations reflecting an investor’s perspective that decarbonization investments must be blue chip.

Successfully implementing and achieving the global clean energy transition is often considered to be primarily a technological challenge, with the focus being the discovery of new means of making and using energy without greenhouse gas emissions. Less understood is the massive investment and capital markets challenge of raising the finances needed to deploy bankable decarbonization assets.

Investment risk reduction is key to success. Understanding and addressing the policy deficiencies that undermine the investment case for decarbonization assets is essential for the clean energy transition and achieving net-zero carbon goals by midcentury.

EF³ was established to analyze investor barriers to at-scale private financial capital flows to assets needed for the energy transition and to develop policy and financial sector recommendations to overcome these barriers in the United States and globally. EF³ considers an all-of-the-above strategy as its fundamental framing and focuses on the mechanisms that can improve the investment quality of clean energy. Through its research and engagement activities, EF³ will help facilitate international, national, and industrywide efforts to scale up investments to decarbonize the economy.

This paper describes the motivation and implementation framework for EF³. It discusses the essential investment barriers facing the clean energy transition and the approach of EF³ to help address those challenges.