Policies to mobilize finance for low-carbon transition

This chapter underscores the inadequacy of market mechanisms to counteract climate change, emphasizing the short-term focus of profit-driven firms. It argues for a regulatory framework aligning corporate interests with societal well-being, emphasizing the internalization of environmental externalities. The feasibility of such alignment lies in crafting policies that make businesses accountable for environmental costs while incentivizing positive outcomes. In a globalized context, the chapter stresses the necessity of international collaboration to address climate disasters effectively. Furthermore, it highlights the pivotal role of finance in driving technological advancements for sustainability, advocating for policy measures to mobilize private investments and mitigate climate risks. The chapter concludes by acknowledging the unprecedented challenge ahead and emphasizes the ongoing exploration of optimal financial and fiscal policies for the transition to a low-carbon economy.