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Project investigates financial instruments to mobilize private investment in low-carbon infrastructure

A rethink towards low-carbon infrastructure is currently often called for, but there is still too little willingness to invest. The IF joint project is investigating why this is the case and which financing instruments can mobilize private investors. One sub-project is headed by Prof. Dr. Andreas Ziegler, Department of Empirical Economic Research at the University of Kassel. Prof. Dr. Christian Klein, Department of Corporate Finance, is also involved.

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The Paris Climate Agreement describes that a redirection of capital flows is necessary to achieve the climate targets. A large proportion of the required investment must be channeled into the provision of low-carbon infrastructure, for example in the form of renewable energies and energy-efficient buildings. However, there is a massive investment gap here, which can be closed by mobilizing institutional and individual investors.

However, this is hampered by a series of convoluted investment barriers and risks, which are to be resolved by political measures at national and European level. Nevertheless, it is to be feared that even these measures will not be sufficient, which will ultimately result in the climate policy targets being missed.

The IF ("Investment funds for low-carbon infrastructure") project uses empirical approaches to investigate the barriers to investment in low-carbon infrastructure measures and how these can be overcome by existing (e.g. green bonds) and possible future financing instruments (e.g. public infrastructure or citizens' funds at national or European level).

IF pursues the overarching hypotheses that such funds represent added value to existing investment instruments and can better mobilize smaller investors in particular. In addition, simulation methods will be used to investigate the potential contribution of the various instruments and actors to closing the investment gap.

The overall project is funded by the Federal Ministry of Research and Education and coordinated by the Potsdam Institute for Climate Impact Research (PIK). The budget for the University of Kassel is approximately 700,000 euros. The project runs from December 2018 to November 2021.



Dr. Gunnar Gutsche
University of Kassel
Department of Empirical Economics
Phone: +49 561 804-7505
Email: gunnar.gutsche[at]uni-kassel[dot]de

Prof. Dr. Andreas Ziegler
University of Kassel
Department of Empirical Economics
Phone: +49 561 804-3038
E-mail: andreas.ziegler[at]uni-kassel[dot]de

Prof. Dr. Christian Klein
University of Kassel
Department of Corporate Finance
Phone: +49 561 804-7565
E-mail: klein[at]uni-kassel[dot]de