Abstract

The Nationally Appropriate Mitigation Action (NAMA) is the new kid on the block in the battle against climate change. The NAMA is the most decisive instrument devised to address the fact that today the only source of growing emissions are the world’s developing countries. But as it is based purely on voluntarism it crucially depends on financing models that can lift the concept off the ground. This book provides the first insights as to how this concept can deliver on its promise – and challenges some of the fundamental mantras in international climate change collaboration.

This book gives the first no-nonsense, hands-on account of the financing principles and perspectives for Nationally Appropriate Mitigation Actions (NAMAs), the new kid on the block in the battle against climate change. NAMAs are finding their own identity, and most importantly, finding a new financial basis without relying on a carbon market and carbon credit. While the NAMA model may be the right instrument at the right time, it is spawned from the climate change negotiation sphere that continues to suffer from its lack of interaction with the other spheres involved in its actual deployment. Despite 20 years of negotiations, a barrier remains between concept and action. The disconnect is first and foremost between the political sphere and the private-sector sphere, and is particularly rooted in the understanding – or misunderstanding – of finance. This book bridges the gap by addressing policymaking and private sector financing in one volume. It disarms myths, hides nothing behind political correctness and applies a good measure of common sense to advance guidance for the financing of actions that will allow developing countries, having become the prime source of greenhouse gas emissions, to contribute to the global battle against climate change.

‘The book covers much ground and represents a substantial advance in a field that has hitherto been mired in politicized discussions on the need to mobilize climate finance.’ —Rasmus Abildgaard Kristensen, ‘International Affairs’

‘Lütken addresses the challenge of NAMA financing head-on and rightly stresses that there is no “magic bullet”. Development practitioners and climate policy developers alike will find lots of food for thought in this book.’ —Axel Michaelowa, Senior Founding Partner, Perspectives GmbH

‘Lütken’s book draws attention to the role export credit agencies could play in green financing given their expertise in covering risk and financing projects that would otherwise not have materialized. This is a much-needed contribution to the climate finance debate!’ —Barbara Buchner, Senior Director, Climate Policy Initiative

‘Green Climate Fund and donors take note!’ —Ash Sharma, Vice President, Carbon Finance and Funds, Nordic Environmental Finance Corporation

Søren E. Lütken is a senior adviser at the UNEP Risø Centre located at the Danish Technical University.

‘Lütken’s book gives an excellent overview of the state of NAMAs as well as a fine analysis of the challenges ahead. Its strength lies in his focus on financial engineering, which can contribute to both reducing costs of desirable initiatives and tapping the existing financial system with known agents and finance products.’ —Jan Vassard, Deputy CEO, Danish Export Credit Agency (EKF)