$25
Per ton CO2e
Reward ceiling for emissions averted by the deployment of green technologies.
Our Work
Ecological Impact Fund
Rewarding verified ecological impact in lower-income countries
Developing countries lag in deploying advanced green technologies. The Ecological Impact Fund (EIF) is a proposed international financing facility that rewards verified emissions reductions achieved through deployment in lower-income countries.
What is the EIF?
A financing facility designed to speed the diffusion of impactful green technologies
Developing countries lag in deploying advanced green technologies. Absent strong environmental regulations, substantial taxes on emissions and green subsidies, there is little motivation to invest in overcoming the challenges posed by patents and technical know-how. Better incentives are needed to intensify the development of green innovations suitable for the developing world and their rapid and wide deployment.
The Ecological Impact Fund (EIF) is a proposed new international financing facility that would enable originators of innovative green technologies to exchange some of their monopoly privileges in return for impact rewards.
How It Works
Impact rewards replace monopoly markups with incentives tied to verified ecological performance
The invited exchange would apply only in the lower-income countries: originators choosing to forgo their monopoly markups in this EIF Zone would receive shares of predictable annual disbursements that are divided according to the emission reductions achieved with deployments of their greenovation in that EIF Zone. The EIF would create an artificial market on which greenovations of many different kinds would be able to compete.
The EIF's main purpose is greatly to improve the diffusion of impactful green technologies in the Global South. It would do so first by inducing participating originators to waive licensing fees and monopoly markups, and second by giving these originators a financial interest in the wide and effective use of their participating innovations. In addition, the EIF would stimulate development of additional greenovations that - tailored to prevailing needs, cultures, circumstances, and preferences in the EIF Zone - would be especially impactful there. These two effects would produce a third: the EIF would help build capacities to develop, manufacture, distribute, install, operate, and maintain greenovations in the EIF Zone.
- Participating originators forgo monopoly markups and licensing fees in the EIF Zone.
- Predictable annual disbursements are divided according to the measured emissions reductions achieved through deployment.
- Different greenovations compete in one artificial market on verified ecological impact.
- The reward model encourages wide use while helping build capabilities to develop, manufacture, distribute, install, operate, and maintain green technologies in the EIF Zone.
Advantages
Advantages of the EIF
The original ASAP page identifies six reasons this model is meant to reward real performance while widening the diffusion of green technologies.
Efficiency
It creates strong incentives to develop and deploy green technologies for the most cost-effective emission reductions across a wide range of sectors and technologies.
Performance
It pays strictly according to actual impact.
Cost Control
It limits cost by means of a fixed annual budget and secures cost-effectiveness through competition among a wide variety of green innovations.
Innovator Attitude
It motivates originators actively to support cost-free deployment of their innovations by helping with installation and know-how, and even through subsidies to poor buyers - to the extent that the additional green impact rewards earned by such efforts are expected to outweigh their cost.
Fairness
It is funded by the main beneficiaries of historical emissions, ensures ample rewards to participating innovators, supports developing countries in their green transformation, and reduces the dangers of climate change for all and especially for the most vulnerable.
Consonance with SDGs
It advances sustainable industrial and technological development in low-income countries (SDG 9) and could immediately mitigate emissions to reduce climate change (SDG 13), including through helping to support access to clean energy (SDG 7) while strengthening international partnership (SDG 17).
Immediate Goal: Ecological Impact Fund (EIF) Pilot in Africa
One or more high-income countries would offer a reward of up to $25 per ton of CO2e emissions averted by the deployment of green technologies in Africa. The pilot would be limited in scope, with each participant earning rewards based on the assessed emissions reductions over three years. Total payments would be capped so that if the projects over-performed, there would be an equiproportionate reduction in payments for each participant. Additionality would be an essential criterion for payments.
3 years
Assessment window
Each participant earns rewards based on assessed emissions reductions over three years.
Africa
Pilot region
The initial pilot is scoped to green technology deployment in Africa.
Capped
Payout rules
If projects over-perform, payments are reduced equiproportionately and additionality remains an essential criterion.
More Information
Background reading and feasibility material
Background material for the full EIF concept and the feasibility of assessing emissions reductions.
