Regional impacts on decarbonisation under evolving financing conditions for energy technologies
Authors/Creators
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Frilingou, Natasha
(Researcher)1
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van de Ven, Dirk-Jan
(Researcher)2
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Sampedro, Jon
(Researcher)2
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Horowitz, Russell
(Researcher)2
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Rodés-Bachs, Clàudia
(Researcher)2
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Nikolakakis, Thomas
(Researcher)1
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Karamaneas, Anastasios
(Researcher)1
- Georgiou, Kimon (Researcher)1
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Koasidis, Konstantinos
(Researcher)1
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Mittal, Shivika
(Researcher)3
- et al. Show all 14 authors
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Frilingou, Natasha
(Researcher)1
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van de Ven, Dirk-Jan
(Researcher)2
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Sampedro, Jon
(Researcher)2
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Horowitz, Russell
(Researcher)2
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Rodés-Bachs, Clàudia
(Researcher)2
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Nikolakakis, Thomas
(Researcher)1
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Karamaneas, Anastasios
(Researcher)1
- Georgiou, Kimon (Researcher)1
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Koasidis, Konstantinos
(Researcher)1
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Mittal, Shivika
(Researcher)3
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Platias, Charalampos
(Researcher)4
- Heussaff, Conall (Researcher)5
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Bertram, Christoph
(Researcher)6, 7
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Nikas, Alexandros
(Researcher)1
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1.
National Technical University of Athens
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2.
Basque Centre for Climate Change
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3.
CICERO Center for International Climate Research
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4.
Panteion University
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5.
Bruegel
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6.
University of Maryland, College Park
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7.
Potsdam Institute for Climate Impact Research
Description
Abstract
Energy-sector decarbonisation requires large-scale investment in low-carbon technologies, yet only a limited share flows to low- and middle-income countries, partly due to higher financing costs and perceived risks. Most modelling exercises do not fully account for how the cost of capital may vary across regions and technologies, potentially influencing policy insights. We examine how plausible, expert-informed long-term trends in de-risking clean energy and increasing risks for fossil fuels could shape decarbonisation pathways, using an empirical dataset differentiated by country and technology. We also evaluate a “corrective justice” policy that taxes corporate windfall profits and redistributes revenues to support low-carbon investments in higher-risk regions. Results suggest that incorporating differentiated cost-of-capital trajectories may improve mitigation outcomes and help narrow the gap between current commitments and long-term climate targets, while indicating potential underestimation of risks associated with bioenergy-based negative emissions technologies in mitigation scenarios for high-income nations.
Files
s41467-026-73522-1.pdf
Additional details
Related works
- Is supplemented by
- Dataset: 10.5281/zenodo.14807257 (DOI)
- Other: https://github.com/NatasjaF/Cost_of_capital (URL)
Funding
- European Commission
- IAM COMPACT - Expanding Integrated Assessment Modelling: Comprehensive and Comprehensible Science for Sustainable, Co-Created Climate Action 101056306
- European Commission
- DIAMOND - Delivering the next generation of open Integrated Assessment MOdels for Net-zero, sustainable Development 101081179
- European Commission
- ACCLIMATE - Accelerating Climate Action: Navigating towards a Low-Emissions, Climate-Resilient Future 101184374