Financing Investments in Clean Technologies - SNF NRP73

The overarching objective of this project is to investigate how society can steer financing towards cleantech investments. Greater understanding about the financing of cleantech is critical not only in light of the massive amount of investment needed but also because cleantech differs from other technologies on two important aspects. First, clean technologies are largely dependent on public support as they suffer from a double externality: an environmental externality, which relates to the fact that firms do not bear the full costs of pollution, and a knowledge externality, which stems from the public good nature of knowledge. As a result, policy uncertainty, i.e. frequent changes in environmental and climate regulations, is particularly harmful to cleantech investments.Second, cleantech investors differ from traditional investors in other technologies: they are of more dispersed, diverse and small-scale nature than traditional investors and may be driven by different (e.g., altruistic) motives. Much of the dynamism in the sector appears to be driven by new types of investors, rather than the traditional ones (e.g. incumbent energy firms).