OECD Business and Finance Outlook 2016

image of OECD Business and Finance Outlook 2016

It is seven years since the global crisis and despite easy monetary policy, financial regulatory reform, and G20 resolutions favouring structural measures, the world economy is not making a lot of progress. Indeed, the responses to the crisis seem mainly to have stopped the banks from failing and then pushed the many faces of the crisis around between regions—currently taking the form of excess capacity in emerging markets. Productivity growth raises income per head, allows companies to pay better wages and it raises demand to help to eliminate excess capacity and improve employment. However, this element is missing in the global corporate sector. The theme of this year’s Business and Finance Outlook is fragmentation: the inconsistent structures, policies, rules, laws and industry practices that appear to be blocking business efficiency and productivity growth.



Fragmentation in clean energy investment and financing

This chapter reviews how policy and market fragmentation is constraining financing of, and investment in, renewable electricity projects. Scaling-up investment in renewable electricity is critical for reducing greenhouse gas emissions from the power sector, and is therefore important for implementing the 2015 Paris Agreement on climate change. Despite increasing cost-competitiveness of renewable electricity technologies, overall investment in renewables projects remains constrained by policy and market obstacles. These hinder development of a sufficient pipeline of bankable projects and affect the risk-return profile of renewable electricity projects. This chapter reviews recent trends in renewable electricity investment and financing and identifies policy misalignments and market barriers constraining investment in renewable electricity, with a focus on fragmentation issues.



This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error