Financing the low carbon transition

This research stream in the UCL Institute for Sustainable Resources delves into the cross-cutting role of finance in the global transition to a low-carbon economy. Special attention is given to exploring avenues for integrating finance elements into climate policy design to enhance the investment switch from fossil fuel to renewable assets, boost financial flows in developing countries and explore market structures for low-carbon finance to mobilise capital at scale.     

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Research areas

Market structures for low-carbon finance

Low-carbon finance markets are defined as markets that direct capital flows directed towards low-carbon technologies. This research area explores how to trigger virtuous cycle of investments and non-linear growth trajectories across different market conditions and stage of technology development.

Investment challenge in developing countries

A step-change in the scale and direction of investment is required to achieve the low-carbon transition, especially in developing economies. In such regions there is a huge disparity between investment needs and current financial flows. This research area explores the challenges of mobilising low-carbon investment in developing economies.

Investment switch from fossil fuel to renewable assets

The transition to a low-carbon economy will entail a large-scale structural change, where capital would need to switch from high to low-carbon assets. This research area explores such dynamics and challenges to leverage capital at scale for new assets while reducing financing for the fossil fuel industry.

Research stories

Recent projects 

• Underwriting investment risks in developing countries (2023-2025), funded by Green Climate Fund.
• Wind investment network for effective market design (2021-2023), funded by UKERC Flexi Fund.
• LINKS: Kick-starting global climate investments: uncovering hidden links in climate finance and exploring dynamic evolution of investment networks for policy design (2019-2024), funded by the ERC.
• RIPPLES: Results and Implications for Pathways and Policies for Low Emissions European Societies (2017-2020), funded by the European Commission (H2020).
• GREEN-WIN: Win-win solutions for green-growth strategies (2015-2018), funded by the European Commission (H2020). 

Financing the low carbon transition in teaching

The 'Climate Finance' module provides students with a background in climate change issues from a multidisciplinary finance and policy perspective. Students will be introduced to key concepts and trends in climate finance; the main sources, instruments, ESG and disclosure initiatives, and analytical approaches used in the field; and deep dives into specific areas, such as the investment challenge in developing countries, biodiversity and hard-to-abate sectors. The Climate Finance and Investment module is part of the Business and Sustainability MSc (core module) and the Economics and Policy of Energy and the Environment MSc (optional module).

Doctoral research (PhD)

Our doctoral researchers cover a broad range of topics in the broader context of our UCL Institute for Sustainable Resources vision and themes, looking at factors related to both the physical environment and people. 

Doctoral research relating to Financing the low carbon transition:

• Serhat Aydogdu – 'Role of venture capital investments to net-zero transition'. 
• Mahmut Halil Ozturk – 'Microgrids for Disaster Preparedness and Recovery'.
• Sumit Kothari – 'Scaling solar energy: an analysis of the structure and development of the investment system that powers growth'.
• Irene Maffini - 'Crowdfunding public private crowd partnerships: a new policy tool to finance energy access projects in developing countries?'.
• Isabelle Rojon - 'The role of multilateral development banks in mainstreaming climate considerations in financial institutions'. 

Researchers