Advance Market Commitments for Climate Change
Would an Advance Market Commitment work in climate finance? CGD visting senior associate Jan von der Goltz joined a panel on Advance Market Commitments (AMCs) at the Marketplace on Innovative Financial Solutions for Development in Paris, March 4, 2010. (For a round-up of the best ideas from the Marketplace, click here. Jan assessed the idea of extending the AMC concept – which CGD pioneered for the vaccine market – to climate finance. The takeaway message: AMCs are powerful tools in dealing with market failure – but they are complex financing structures, and must be tailored to the challenge at hand. It makes little sense to transplant the original AMC structure into the climate field 1:1. Rather, true to the spirit of the AMC, donors should look at the challenges in financing a given climate project, and design an innovative financing scheme that fits them.