Exploring options to measure the climate consistency of real economy investments
The transport sector in Latvia
Mitigating climate change requires aligning real economy investments with climate
objectives. This pilot study measures the climate consistency of investments in transport
infrastructure and vehicles in Latvia between 2008 and 2018, estimated at EUR 1.5
billion per year on average. To do so, three complementary mitigation-related reference
points are used. Applying the criteria defined by the European Union Taxonomy for
Sustainable Activities results in 4.2% of investments assessed as making a substantial
contribution to climate change mitigation. Comparing actual greenhouse gas trajectories
for each transport mode to a 2°C scenario from the International Energy Agency’s for
the European Union and to projections from Latvia’s 5th National Communication to
the UNFCCC, indicates 32% climate-consistent and up to 9% climate-inconsistent investments.
The majority of investments volumes could at this stage not be characterised due to
limitations relating to the granularity or coverage of the reference points. Comparing
current trends to 2030 and 2050 decarbonisation targets nevertheless highlights future
investment and financing challenges, especially for road transport. The methodology
piloted in this study can be replicated and scaled up across countries and sectors,
using different or complementary reference points specifically aligned to the temperature
goal of the Paris Agreement.
Published on May 20, 2020
In series:OECD Environment Working Papersview more titles