The McKinsey Cost Curve identifies 19 Gt of abatements by 2020
making it technically feasible to achieve 450ppm
McKinsey global GHG abatement cost curve, 2020* (up to costs of €60/t, excluding transaction costs, 4%
discount rate)
Best Practice Policies
REDD and RPS
Tech development and deployment
60
Solar PV
50
Reduced intensive agriculture conversion
Solar conc.
Organic soil restoration
Wind (high penetration)
Pastureland afforestation
Biomass
Grassland management
Wind
(low
penetration)
Reduced deforestation
40
30
20
from pastureland conversion
Reduced deforestation from
slash-and-burn agriculture conversion
10
Nuclear
0
-10
-20
-30
Rice management
Shift coal new build to gas
Electricity from landfill gas
New waste recycling
10
15
17 Gt
19 Gt
Abatement potential
Gt CO2e
-40
-50
-60
-70
-80
-90
Cars ICE improvement
Cars aerodynamics improvement
Retrofit building envelope (commercial)
Lighting – switch
incandescents
to LED (residential)
-100
Source: McKinsey Global GHG Abatement Cost Curve v2.0
20
Breakdown by geographic
location:
• 5 Gt in developed country
geographies
• 14 Gt in developing country
geographies
Breakdown by abatement type:
• 9 Gt for terrestrial carbon
• 6 Gt for energy efficiency
• 4 Gt for low carbon energy
supply
Climate Finance 2013-2014
Government budgets face the biggest potential change due to mitigation policies –
Oil and Gas is a good example
Forecast Split of Oil and Gas Revenues between Costs, Government
Take and Oil Companies (2014-2050) - Business As Usual Case
12000
10000
Commercial Oil Company
Free Cash Flows
US $2013/ Year
8000
6000
National Oil Company Free
Cash Flows
Government Take
(Taxes, Royalties)
4000
2000
0
Capital Expenditures
Operating Costs
Source : Rystad, CPI
Governments and Government owned companies will receive close to 90% of the net
present value of future oil production between now and 2050
4
Institutional Investors are well positioned for renewable energy projects but illiquidity,
project size constraints, and diversification requirements limit direct investment
Potential direct
institutional investment
in renewable energy
projects
Investor mapping
Climate and Finance: A Roadmap
POL. ECONOMY OF
ENERGY & LAND USE
LANDSCAPE OF PUBLIC
FINANCE
INTEGRATING PUBLIC+
PRIVATE FINANCE
SYSTEMS TRANSITION
Macro-economics
Aligning NDBs & DFIs
Market Design
Growth
New Portfolios
& Mandates
Financial Instruments &
Platforms
Industry Organization
of Public Finance
Innovative Instruments &
Vehicles
Utility Business Models
Business Models of
Public Finance
Private Business Models
Stranded Assets
Rationale and Scale of
Public Finance
Performance quality
Performance of
Instruments
Case Studies & System
Change
How are we managing
climate risk and needs for
public finance in low carbon
infrastructure?
(From green to brown)
Are there public budgets
available for new
infrastructure at scale and
how are they used and
invested?
How does public funding
align with private finance?
(From plans to deals)
What is effective finance for
transitions to more
sustainable energy and land
use systems?
(From deals to systems)
Micro-economics
NDC implementation
Global Innovation Lab for Climate Finance: Agricultural Supply
Chain Adaptation Facility
partner with agribusiness corporations to provide farmers with technical and financial
support for climate-resilient investments through the corporations’ supply chains.
Global Innovation Lab for Climate Finance: Climate Investor One
facilitate early-stage development, construction financing, and refinancing to fast-track
RE projects in developing countries