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Regional impacts on decarbonisation under evolving financing conditions for energy technologies.
Natasha Frilingou1, Dirk-Jan Van de Ven2, Jon Sampedro2,3
1Energy Policy Unit, School of Electrical & Computer Engineering, National Technical, University of Athens, Athens, Greece. nfrilingou@epu.ntua.gr.
Nature Communications
|May 19, 2026
Summary
Addressing the energy sector
Area of Science:
- Energy Economics
- Climate Change Mitigation
- Sustainable Development
Background:
- Global energy decarbonisation necessitates substantial investment in low-carbon technologies.
- Limited investment flows to low- and middle-income countries are attributed to higher financing costs and perceived risks.
- Existing energy models often overlook regional and technological variations in the cost of capital, impacting policy relevance.
Purpose of the Study:
- To analyze how evolving risk perceptions and financing costs for clean energy and fossil fuels influence decarbonisation pathways.
- To evaluate the effectiveness of a "corrective justice" policy in redirecting funds towards low-carbon investments in higher-risk regions.
Main Methods:
- Utilizing an empirical dataset with country- and technology-specific data.
- Incorporating expert-informed projections of long-term trends in de-risking clean energy and increasing fossil fuel risks.
- Modeling decarbonisation pathways with differentiated cost-of-capital trajectories.
Main Results:
- Differentiated cost-of-capital trends can enhance mitigation outcomes and reduce the gap towards climate targets.
- The proposed "corrective justice" policy shows potential for supporting investments in higher-risk regions.
- High-income nations may underestimate the risks associated with bioenergy-based negative emissions technologies in their mitigation scenarios.
Conclusions:
- Accounting for varying cost-of-capital is crucial for effective climate mitigation strategies.
- Policy interventions are needed to ensure equitable investment in the global energy transition.
- Further research is required to accurately assess risks of specific negative emissions technologies.
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