Public Policies to Unlock Private Investment in Green Energy Projects (The Case of Iran as a Resource-Rich Country)

Global climate change and the importance of investing in green energy projects require the contribution of private investors to achieve carbon-free economic growth. Statistics show that the increase in clean energy spending in some resource-rich countries is impressive. However, in emerging and developing economies, government accounts for more than half of this spending, compared to less than 20 percent in developed economies. This paper explores the important role of governments in reducing impediments to private investment in green projects with a focus on resource-rich economies. Governments can formulate some supportive policies and legal frameworks, as well as set renewable energy targets, feed-in tariffs, and tax incentives, create markets, and stimulate demand for green energy. In Iran despite public intervention to attract private investment in green project since 2001 (in the form of public procurement, grants, creation of a centralized regulatory, feed-in tariff, targeting subsidies, and setting renewable energy-related targets) more policy measures to reduce risks, redesign new financial methods to attract global investments and develop deeper financial systems are necessary.