This research stream at the UCL Institute for Sustainable Resources examines the central role of both public and private finance in driving the global transition to a low-carbon economy. It places particular emphasis on enhancing financial flows to developing countries, understanding risk assessment dynamics, and analysing how the value and stability of financial assets are influenced by low-carbon transition processes. The research also explores how climate considerations shape public and private investment behaviour and investigates ways to integrate financial mechanisms into climate policy design to mobilise capital at scale.
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Research areas
Market Structures and Advanced Risk Modelling for Low-Carbon Finance
Low-carbon finance markets are those that channel capital toward low-carbon technologies and solutions. This research area examines how to stimulate virtuous investment cycles and non-linear growth trajectories across varying market conditions and stages of technology development. It focuses on capturing the complex, compounded nature of risk factors — bridging the gap between project-level fundamentals, market perceptions, and the pricing of risk mitigation instruments. The goal is to develop tailored risk profiles, assessment frameworks, and pricing tools that enable investors and policymakers to better align capital flows with net-zero objectives.
Investment challenge in developing countries
A step-change in the scale and direction of investment is required to achieve the low-carbon transition, especially in developing economies. In such regions there is a huge disparity between investment needs and current financial flows. This research area explores the challenges of mobilising low-carbon investment in developing economies.
Financing corporate decarbonisation
Publicly traded companies in the energy and energy-intensive sectors provide essential services to modern societies, supporting industrial production, transportation, and energy distribution. They offer critical competitive advantages to countries and are a major source of employment. However, their production processes account for a large share of anthropogenic greenhouse gas emissions, making their operations one of the leading contributors to climate change. This research area explores how corporations direct capital toward low-carbon activities, how their decarbonisation pathways compare with those aligned to global climate targets, and, more broadly, how their investment decisions are shaped by the challenges and uncertainties of the low-carbon transition.
Investment switch from fossil fuel to renewable assets
The transition to a low-carbon economy will entail a large-scale structural change, where capital would need to switch from high to low-carbon assets. This research area explores such dynamics and challenges to leverage capital at scale for new assets while reducing financing for the fossil fuel industry
Research stories
Tracing climate investments and shifting investment behaviour
Seeking to support system changes to the financial industry on climate change issues through data-driven analysis from Principle Research Fellow Nadia Ameli.
UCL researchers co-author Financial Times piece calling for high-carbon investment intensity tax
Read about our Financial Times 'Sustainable Views' comment piece calling for the introduction of an investment emissions intensity tax to penalise investors based on the emissions their portfolios finance.
Transparency on climate risks is important, but it will not divert capital away from fossil fuels w…
In this Financial Times 'Sustainable Views' comment piece researchers question the effectiveness of climate disclosure initiatives in changing investment outlays.
Post COP27: What happened and was it enough?
Dr Nadia Ameli and Katie Kedward discuss the financial implications of COP27, international financial institutions, and also the focus on loss and damage at COP27 in the UCL Generation One podcast.
Fairer finance could speed up net zero for Africa by a decade
Levelling up access to finance so that poorer countries can afford the funds needed to switch to renewable energy could see regions like Africa reaching net zero emissions a decade earlier, according to a study led by UCL researchers.Read press coverage on:• 'Climate Rules Need EM Focus to Avoid Investment Trap, Study Says' - Bloomberg• 'Green Finance Isn't Going Where It's Needed' - Bloomberg• 'How 'Climate Investment Traps’ Create A Vicious Cycle For African Nations' - Forbes
Recent projects
- Designing a Multilateral Guarantee Facility for International Low-Carbon Investment: Legal, Institutional, and Political Dimensions (2024-2026), pump-priming funding by UCL's Grand Challenge of Climate Crisis Challenges
- Underwriting investment risks in developing countries (2023-2025), funded by Green Climate Fund.
- Wind investment network for effective market design (2021-2023), funded by UKERC Flexi Fund.
- LINKS: Kick-starting global climate investments: uncovering hidden links in climate finance and exploring dynamic evolution of investment networks for policy design (2019-2024), funded by the ERC.
- RIPPLES: Results and Implications for Pathways and Policies for Low Emissions European Societies (2017-2020), funded by the European Commission (H2020).
- GREEN-WIN: Win-win solutions for green-growth strategies (2015-2018), funded by the European Commission (H2020).
Financing the low carbon transition in teaching
The 'Climate Finance' module provides students with a background in climate change issues from a multidisciplinary finance and policy perspective. Students will be introduced to key concepts and trends in climate finance; the main sources, instruments, ESG and disclosure initiatives, and analytical approaches used in the field; and deep dives into specific areas, such as the investment challenge in developing countries, biodiversity and hard-to-abate sectors. The Climate Finance and Investment module is part of the Business and Sustainability MSc (core module) and the Economics and Policy of Energy and the Environment MSc (optional module).
Economics and Policy of Energy and the Environment MSc
The 'Climate Finance' module is relevant to the Economics and Policy of Energy and the Environment MSc as it outlines the sector historical development, explaining the roles of international governance and private actors in shaping the current landscape of climate finance. It will also focus on the main financial instruments, structures and investment criteria used in climate finance to provide insight into current practice.
Examples of past dissertation focusing on climate finance are:
- 'Determinants of Fossil Fuel Divestment in Banks’ Debt Financing'
- 'Exploring the potential of investment emissions intensity taxation to induce reallocation of regulated fund investment towards more low-carbon investment'
- 'Who cares wins: the relationship between ESG performance and financial markets performance'
Sustainable Resources: Economics, Policy and Transitions MSc
Our research is relevant to the Sustainable Resources: Economics, Policy and Transitions MSc as it explores investment challenges in specific geographical regions (e.g. developing countries), and sectors, to illustrate the importance of context in shaping financial flows.
Examples of past dissertation focusing on climate finance are:
- 'Is the rising of ESG criteria in investor allocation strategies risks diverting capital away from emerging economies?'
- 'Empty Pledges: The Inequitable Distribution of International Climate Finance to Indigenous Communities'
- 'Assessing the impact of COVID-19 on the investment climate of renewable energy in developing countries'
Business and Sustainability MSc
The 'Climate Finance' module is core to the Business and Sustainability MSc as it covers climate risks in investment portfolios, and the role of central banks and financial regulators in governing climate financial flows and climate finance scenarios.
Doctoral research (PhD)
Our doctoral researchers cover a broad range of topics in the broader context of our UCL Institute for Sustainable Resources vision and themes, looking at factors related to both the physical environment and people.
Doctoral research relating to Financing the low carbon transition:
- 2025 – 2026: Shuting Fan (visiting Phd student from Tsinghua University, China), “Climate adaptation investment”
- 2025: João Braga, “The roles of development banks in driving deforestation and redirecting finance in Brazil, the Amazon and the State of Pará”
- 2024: Vivek Gandhi, “Leveraging private capital to scale renewable energy deployment in emerging markets”
- 2024: Zaineb Abid, “Analysing the potential of blended finance for renewable energy innovation in developing countries using multi-level perspective – a case of Pakistan”
- 2024: Yuncheng Song, “Impact of disclosure initiatives on the low-carbon transition: mechanism, mitigation and outcome”
- 2023: Serhat Aydogdu, “Role of venture capital investments to net-zero transition”
- 2022: Mahmut Halil Ozturk, “Energy transition for autonomous islands: the case of Aegean Sea”
- 2018: Irene Maffini, “Crowdfunding public private crowd partnerships: a new policy tool to finance energy access projects in developing countries”
Researchers
Nadia Ameli
Professor
n.ameli@ucl.ac.uk
Michael Grubb
Professor
m.grubb@ucl.ac.uk
Simone Cenci
Lecturer in Economics and Finance of Sustainability
simone.cenci@ucl.ac.uk
Hugues Chenet
Honorary Senior Research Fellow
h.chenet@ucl.ac.uk
Papa Orgen
Research Fellow in Climate Finance
p.orgen@ucl.ac.uk
Sumit Kothari
Researcher
sumit.kothari.16@ucl.ac.uk
Yaroslav Melekh
Research Fellow
yaroslav.melekh@ucl.ac.uk