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OECD Releases Paper on Finance for Green Infrastructure

OECD4 October 2012: The Organisation for Economic Co-operation and Development (OECD) has released a regional development working paper on green infrastructure projects, which explores local-level funding strategies, the leadership of municipal governments, and private-sector investments for urban sustainability projects. The paper, titled “Financing Green Urban Infrastructure," makes recommendations on removing barriers to local government action and creating coherence between national and local green policies.

The paper highlights that since cities often have control over the selection and revenue sources for investments in the transportation, building, waste and water, and energy sectors, their decisions will impact the sustainable design of communities. Focusing on finance mechanisms for green infrastructure, the report recommends that cities should "green" their existing revenue sources such as the local tax code and water and waste fees to account for the “social costs of actions affecting the environment.”

The paper also explores new options for financing green infrastructure development, recommending public-private partnerships (PPPs), tax increment financing, and more local access to carbon finance sources. Evaluating success in private-sector investment in infrastructure, the report stresses the existence of green urban project markets, low risks, and favorable returns on investment to attract funds.

The recommendations and instruments are aimed primarily at cities in industrialized and middle-income countries. [Publication: Financing Green Urban Infrastructure] [OECD Announcement]