UNITEDNATIONSCONFERENCEONTRADEANDDEVELOPMENTIInntteerrnnaattiioonnaallIInnvveessttmmeennttiinnCClliimmaatteeCChhaannggeeMMiittiiggaattiioonnaannddAAddaappttaattiioonnTrendsandPolicyDevelopmentsGeneva,2022INTERNATIONALINVESTMENTINCLIMATECHANGEADAPTATIONANDMITIGATION?2022,UnitedNationsThisworkisavailablethroughopenaccess,bycomplyingwiththeCreativeCommonslicencecreatedforintergovernmentalorganizations,at/licenses/by/3.0/igo/.Thefindings,interpretationsandconclusionsexpressedhereinarethoseoftheauthorsanddonotnecessarilyreflecttheviewsoftheUnitedNationsoritsofficialsorMemberStates.ThedesignationsemployedandthepresentationofmaterialonanymapinthisworkdonotimplytheexpressionofanyopinionwhatsoeveronthepartoftheUnitedNationsconcerningthelegalstatusofanycountry,territory,cityorareaorofitsauthorities,orconcerningthedelimitationofitsfrontiersorboundaries.Photocopiesandreproductionsofexcerptsareallowedwithpropercredits.Thispublicationhasnotbeenformallyedited.UnitedNationspublicationissuedbytheUnitedNationsConferenceonTradeandDevelopmentUNCTAD/DIAE/INF/2022/2TABLEOFiiCONTENTSThispublicationaimstoinformthedebateonclimatefinanceatCOP27.Itpresentsthelatestinterna-tionalclimatechangeinvestmenttrendsandpolicydevelopments.ThepublicationbringstogetherthekeyfindingsofseveralrecentmonitorspublishedbyUNCTAD’sDivi-siononInvestmentandEnterprise,includingaSpecialIssueoftheGlobalInvestmentTrendsMonitor(GITMno.43)onclimatechangeinvestmenttrends,aSpecialIssueoftheInvestmentPolicyMonitor(IPMno.9)onnationalinvestmentpolicydevelopmentsrelevanttoclimatechange,andtwoIIAIssuesNotesondevelopmentsintheareaofinternationalinvestmentagreementsandinvestor-Statedisputesettlement.ThepublicationfurtherincorporateskeyfindingsfromtheWorldInvestmentReport2022,insightsfromtheintergovernmentaldebateduringUNCTAD’sMulti-YearExpertMeetingonInvestmentandClimateChangeheldinOctober2022,andelementsfromtheG20CompendiumonPromotingInvestmentforSustainableDevelopment,preparedbyUNCTADundertheguidanceoftheIndonesianpresidencyoftheG20.UNCTADwillcontinuetomonitorglobalinvestmenttrendsandprospects,aswellasnationalandin-ternationalpolicydevelopments,withaspecialfocusonprogresstowardstheSDGsandonclimatechangemitigationandadaptation.TABLEOFiiiCONTENTSINTERNATIONALINVESTMENTINCLIMATECHANGEADAPTATIONANDMITIGATIONEXECUTIVESUMMARY 1A. INVESTMENTTRENDS 2B. NATIONALINVESTMENTPOLICYTRENDS 7C. INTERNATIONALINVESTMENTAGREEMENTS 13D. INVESTOR–STATEDISPUTESETTLEMENT 23REFERENCES 31TABLEOFivCONTENTSEXECUTIVESUMMARYInvestmentinclimatechangemitigationandadaptationrisksatemporarysetback.Monthlyinvestmentdatashowsdecliningnumbersofnewprojectannouncementsafterthefirstquarterof2022.Worseningfinancialconditionsandinvestoruncertaintycausedbythewarandtheeffectsofthetriplefood,fuelandfinancecrisesareputtingdownwardpressureonallcross-borderinvestment.Althoughthesearchforsolutionstotheenergycrisishasraisedhopesforafastertransitiontogreenenergy,thefirstsignalsarethatclimatechangeinvestmentwillnotescapetheshort-termFDIslump.Inclimatechangemitigationsectors,thenumberofnewprojectannouncementsinthefirstthreequartersof2022was7percentlowerthanin2021.Inadaptationsectorsitwas12percentlower.Urgentactionisneededforinternationalinvestmenttoreturntoitsgrowthpath.Thelonger-termtrendininternational(cross-border)investmentinclimatechangemitigationandadap-tationinvitesthreecriticalobservations:(i)althoughinvestmentinclimatechangemitigationhasseensignificantgrowthaftertheadoptionoftheSDGsin2015andastrongaccelerationafter2020,therateofgrowthisnotsufficienttomeeteventhepre-SDGneedsassessment(UNCTAD,2014);(ii)therearesignifi-cantregionalimbalancesinthegrowthofclimatechangeinvestment,andmostissofarconcentratedindevelopedcountries(especiallyEurope);(iii)internationalinvestmentinadaptationsectorslagsfarbehindinvestmentinmitigation,especiallyrenewableenergy.TargetedpoliciesforattractingFDIinclimatechangemitigationandadaptationsectorsmatter,probablyevenmorethaninothersectors.Recentnationalpolicyinitiativestopromoteinternationalinvestmentinclimatechangeadaptationandmitigationfocusprimarilyontherenewableenergyandelectricitysectors.Thesesectorsaccountfor60percentofclimatechangeinvestmentmeasuresadoptedworldwideinthelastdecade.Othermitigationareashavenotreceivedequalpolicyattention,andpolicymeasurestoattractinvestmentinclimatechangeadaptationsectorsstillneedtobedevelopedandimplementedindevelopingcountries.Indevelopedeconomies,threeoutoffourpolicymeasuresinclimatechangesec-torsinrecentyearsconcernedtheintroductionorexpansionofFDIscreeningmechanisms,reflectingatrendtowardsheightenednationalsecurityconcerns.Theneedforclimateactionhasaddedurgencytothereformoftheinternationalinvestmentagreements(IIA)regime.ThecurrentIIAregimecanconstrainStateswhenimplementingmeasurestocombatclimatechange.Theriskofinvestor–Statedisputesettlement(ISDS)beingusedtochallengeclimatepoliciesisamajorconcern.Twobroadapproachestofast-trackIIAreformcanbeconsidered:first,makingindividualIIAsclimate-responsivebyensuringthatonlylow-carbonandsustainableinvestmentsarecoveredandbysafeguardingtherightanddutyofStatestoregulateinthepublicinterest.Thiscanbecoupledwithprovi-sionsaimedatpromotingandfacilitatingsustainableinvestment.Second,exploringthepossibilitiestoreconceptualizethescope,purposeanddesignoftheIIAregimethroughengagementincomprehensiveIIAreformactionsatthemultilateral,regional,bilateralandnationallevels.Innovativewaysandmeansareneededtoattractinternationalprivateinvestmentinclimatechangead-aptationandmitigation.Enablingpolicyframeworks,public-privatepartnerships,pipelinesofbankableandimpactfulprojects,andinitiativestode-riskclimateFDIareallimportant.Theintroductionofclimateimpactassessmentsofinvestmentprojectsshouldbeconsidered.Investmentpromotionagencies(IPAs)candevelop“redcarpet”servicesforclimateFDI.ProvisionsrelatedtoclimateFDIshouldbeconsideredforinclusionininternationalinvestmentagreements.Finally,capitalexportingcountriescanincludeout-wardFDIpoliciesaspartoftheirclimatestrategies,forexample,bylinkingoutwardFDIsupporttocarboncontentandstandards,andbysupportingclimate-impactreportingrequirements.TABLEOF1CONTENTSINTERNATIONALINVESTMENTINCLIMATECHANGEADAPTATIONANDMITIGATIONA. INVESTMENTTRENDSGlobalforeigndirectinvestment(FDI)flowsinthesecondquarterof2022reachedanestimated$357billion,down31percentfromthefirstquarterand7percentlessthanthequarterlyaverageof2021.ThenegativetrendafterthefirstquarterreflectsashiftininvestorsentimentduetotheUkrainewar;thefood,fuelandfinancecrisesaroundtheworld;risinginflationandinterestrates;andfearsofacomingrecession.Expectationsforthefullyearareforamarkedslowdown.Inlinewiththedownshiftinglobalinvestment,cross-borderinvestmentinclimatechangemitigationandadaptationislikelytodeclinein2022.Thenumberofnewprojectannouncementsinthefirst3quartersof2022was7percentlowerthanin2021inmitigation,and12percentlowerinadaptationsectors(FigureA.1).FigureA.1.Climatechangeinvestmenttrend,Q1-Q32022vs2021,greenfieldprojectannouncementsandinternationalprojectfinancedeals(projectnumbers)MitigationRenewableenergyOtherenergyefficiencyLowcarbontransportGreenmineralsAdaptationWatermanagementOtheradaptationSource:UNCTAD,basedoninformationfromtheFinancialTimesLtd,fDiMarkets(www.fD)forannouncedgreenfieldFDIprojectsandRefinitivSAforinternationalprojectfinancedeals.Note:Numbersfor2022areprojectedbasedonthefirstthreequartersforinternationalprojectfinancedealsandthefirst8monthsforgreenfieldprojects.TABLEOF2CONTENTSINTERNATIONALINVESTMENTINCLIMATECHANGETableA.1.Announcedgreenfieldprojectsandinternationalprojectfinancedealsinclimatechangesectorsandfossilfuelenergy,2020–2021andpartialyeardatafor2022(millionsofdollarsandnumber)GreenfieldprojectsInternationalprojectfinancedealsClimatechange-relevant2021–20222021–2022sector202020212022:Q1-Q3Growthrate202020212022:Q1-Q3Growthrate(%)(%)RenewableenergyValue9675097584169078160189153413374199653-36Numberofprojects52548632717861098759-8OtherenergyefficiencyValue237055821271064831663913456161749-39Numberofprojects197486294-942153100-13LowcarbontransportValue25015650037920214110473196-61Numberofprojects101291312229-45AdaptationValue73644482904-238341003581288Numberofprojects256835-2323222021WatermanagementValue61340392574-43834999881288Numberofprojects8215-6423212027OtheradaptationValue122.87408.7133021-38-..Numberofprojects174730-4-1-..GreenmineralsValue1037508355226395522200712665-23Numberofprojects11382811173219-21FossilfuelenergyaValue4755016234521973828437117976149136-64Numberofprojects9167487123181102-25Source:UNCTAD,informationfromtheFinancialTimesLtd,fDiMarkets(www.fD)forannouncedgreenfieldFDIprojectsandRefinitivSAforinternationalprojectfinancedeals.Note:Fossilfuelinvestmentsincludepowergenerationandextractionofoil,gasandcoal.TABLEOF3CONTENTSINTERNATIONALINVESTMENTINCLIMATECHANGEADAPTATIONANDMITIGATIONTableA.2.Announcedgreenfieldprojectsandinternationalprojectfinancedealsinclimatechangemitigation,2020–2021andpartialyeardatafor2022(number)GreenfieldprojectsInternationalprojectfinancedeals2021–20222021–2022Region/economy202020212022:Q1-Q3Growthrate202020212022:Q1-Q3Growthrate(%)(%)World732984630-48401273868-9Developedeconomies483724449-7549865592-9Europe343514305-11336543405-1EuropeanUnion275410215-212744093173OtherEurope6810490306213488-12NorthAmerica921571116130203116-24Otherdevelopedeconomies485333-78311971-20Developingeconomies2492601814291408276-10Africa4048464443444742NorthAfrica5630650971090OtherAfrica354216-4334373733Asia99138931108187120-14CentralAsia3102-70893-56EastAsia254219-32113515-43South-EastAsia30312731475838-13SouthAsia1615166028695710WestAsia254029914167-42LatinAmericaandtheCaribbean110734217SouthAmerica825925-3612215098-13CentralAmerica2513157313155-56Caribbean31-..4106-20Oceania-112-..Source:UNCTAD,informationfromtheFinancialTimesLtd,fDiMarkets(www.fD)forannouncedgreenfieldFDIprojectsandRefinitivSAforinternationalprojectfinancedeals.ClimatechangeinvestmentshowedanupwardtrendaftertheadoptionoftheSDGsin2015,andastrongaccelerationin2021,especiallyinrenewableenergy(FigureA.2).Theboomwassupportedbypost-COVIDstimulusinvestmentpackages,particularlyinEurope,andloosefinancingconditionsforinternationalprojectfinanceworldwide.Totalprojectvaluesin2021weretwicethepre-pandemiclevel.Thismomentum,however,isnowatrisk.TABLEOF4CONTENTSINTERNATIONALINVESTMENTINCLIMATECHANGEFigureA.2.Announcedgreenfieldprojectsandinternationalprojectfinancedealsinclimatechangesectors,2011–2022(billionsofdollars)RenewablesLow-emissiontransportEnergyefficiency/emissionreductionAdaptation70060050040030020010002011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022*Source:UNCTAD,informationfromtheFinancialTimesLtd,fDiMarkets(www.fD)forannouncedgreenfieldFDIprojectsandRefinitivSAforinternationalprojectfinancedeals.Note:Valuesfor2022areprojectedbasedonthefirstthreequartersforinternationalprojectfinancedealsand8monthsforgreenfieldprojects.FigureA.3.Announcedgreenfieldprojectsandinternationalprojectfinancedealsinrenewableenergy,2011–2022(projectnumbers)AfricaDevelopingAsiaEuropeLatinAmerica&theCaribbeanNorthAmericaOceaniaOtherdeveloped70060050040030020010002011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022*Source:UNCTAD,informationfromtheFinancialTimesLtd,fDiMarkets(www.fD)forannouncedgreenfieldFDIprojectsandRefinitivSAforinternationalprojectfinancedeals.Note:Valuesfor2022areprojectedbasedonthefirstthreequartersforinternationalprojectfinancedealsand8monthsforgreenfieldprojects.TABLEOF5CONTENTSINTERNATIONALINVESTMENTINCLIMATECHANGEADAPTATIONANDMITIGATIONMitigationprojectsaccountforthelion’sshare(94percent)ofinternationalclimateinvestments,whileadaptationprojectscontinuetolagfarbehind.Mostmitigationinvestmentsareinrenewableenergyand,toalesserextent,invariousenergyefficiencyprojects.SeeUNCTAD’sWorldInvestmentReport2022.fordetailsontherelativepropensitiesforinternationalinvestorstoparticipateindifferenttypesofclimatechangeprojectsandtableintheappendix).Developedeconomiesaccountfortwothirdsofinternationalprojectfinancedealsandgreenfieldinvestmentsinrenewables.Europealoneaccountsformorethanhalfofrenewablesprojects,withmorethan700projectsinthefirstthreequartersof2022.NorthAmericaanddevelopingAsiaattractedabout200projectseach,LatinAmericaandtheCaribbeanabout150,andAfricaabout100(FigureA.3).Theshiftfromfossil-fueltogreeninvestmentstosupporttheenergytransitionrisksasetbackduetothelossofmomentuminrenewablesandhighoilandgasprices(FigureA.4).Fornow,thedownwardtrendininvestmentisalsoaffectingextractiveindustriesandfossil-fuel-basedenergygeneration,withprojectnumbersinthesesectorsabout16%lowerinthefirst3quartersof2022.Buthighprofitsofmultinationalsinthesesectorscombinedwiththeenergycrisiscouldleadtoarenewedpushforinvestmentsindirtyenergy.Anearlyindicationisthevalueofcross-borderM&Asintheextractiveindustry,whichrosesix-foldinthefirstthreequartersof2022(seeGITM,no.42).FigureA.4.Announcedgreenfieldprojectsandinternationalprojectfinancedealsinrenewablesandfossilfuels,2011–2022(projectnumbers)Fossilfuel Renewables1800160014001200100080060040020002011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022*Source:UNCTAD,informationfromtheFinancialTimesLtd,fDiMarkets(www.fD)forannouncedgreenfieldprojectsandRefinitivSAforinternationalprojectfinancedeals.Note:Fossilfuelinvestmentsincludepowergenerationandextractionofoil,gasandcoal.Numbersfor2022areprojectedbasedonthefirstthreequartersforinternationalprojectfinanceand8monthsforgreenfieldprojects.TABLEOF6CONTENTSINTERNATIONALINVESTMENTINCLIMATECHANGEB. NATIONALINVESTMENTPOLICYTRENDSTargetedpoliciesaimedatattractingFDIinclimatechangemitigationandadaptationsectorsmatter,probablyevenmoresothaninothersectors.Intherenewableenergysector,forexample,energypoliciesarecriticallyimportanttoattractFDIindevelopingcountries.WhileFDIattractioninthesectoralsodependsonothergenerallyaccepteddeterminantsofinvestmentsuchasinstitutionalandmacroeconomicconditions,thesinglemostimportantdeterminanttoattractFDIinthesectoristheexistenceofrenewableenergypolicies,includingriskmitigationmechanismsandtariffregulation(e.g.feed-intariffs)orregulatoryaspectssuchasaccesstothegrid(KeeleyandIkeda,2017;Mahbubetal,2022;RagosaandWarren,2019;CriscuoloandMenon,2015;KeeleyandMatsumoto,2018).Otherimportantdeterminantsincludetheprovisionofinternationalpublicfinance(RagosaandWarren,2019,Ha??i?etal.,2015),theexistenceandqualityofPPPmechanisms(CedrickandLong,2017;DavidandVenkatachalam,2018),andpolicystabilityandlonger-termperspectiveofpublicpolicies(CriscuoloandMenon,2015).PoliciesalsoplayakeyroleinmitigatingthepossibleenvironmentalharmofFDIinthehostcountryandtappingintothepositiveenvironmentalexternalities,e.g.thetransferoftechnologyandthediffusionofmanagementpracticestolowercarbonemissions(Sarkodieetal,2020;Udemba,2021;NejatiandTaleghani,2022).OntheeveoftheadoptionoftheSDGs,UNCTADestimatedthatbetween2015and2030theannualinvestmentrequiredforclimatechangemitigationandadaptationindevelopingcountrieswas$630-970billion,withaninvestmentgapof$440-780billion(UNCTAD,2014).InternationalinvestmentinsectorsrelevanttotheSDGsindevelopingcountriesincreasedsubstantiallyin2021,by70percent,butmostofthegrowthwenttorenewableenergy(UNCTAD,2022).Inthecontextofincreasingfinancingneedsofdevelopingcountriestorespondtotheclimatechangeadaptationchallenge(UNEP,2021)andtheemergencytoenableclimateresilienceinarapidlynarrowingwindowofopportunity(IPCC,2022),effectivepoliciestomobilizeprivatesectorinvestmentandFDIinkeyadaptationandmitigationsectorsareneeded.BetweenJanuary2010andJune2022,103nationalpolicymeasuresaffectingFDIinclimatechange-relatedsectorswereadoptedworldwide.TheanalysisofthesemeasuressignalsthatinitiativestopromoteclimatechangeadaptationandmitigationthroughFDIarestillveryconcentratedintherenewableenergyandelectricitysector(60percentofthemeasures).Italsohighlightsdifferingconcernsbetweendevelopinganddevelopedcountries.Indevelopingeconomies,30percentofthepolicymeasuresadoptedinclimatechange-relatedsectorsbetween2010and2022concernedliberalization,mostlyrelatedtotheunbundlingoftheenergymarketortheprivatizationofState-ownedenterprises(SOEs).Theremainderprimarilyconsistedofmeasuresaimedatpromotinginvestmentinrenewableenergygenerationandingreentechnologies(e.g.incentiveschemesaimedatreducingthecarbonfootprintofindustrialandagriculturalproduction);oratintroducingregulationstopromotethegreenenergytransition(e.g.theadoptionofcarbontaxes,thepromotionofsustainabilitystandardsortheintroductionofrisk-basedbusinesslicensingsystems).Conversely,indevelopedeconomies,3outof4measureswererelatedtotheintroductionorenhancementofFDIscreeningmechanisms,confirmingthetrendtowardsheightenednationalsecurityconcernshighlightedbyUNCTADinrecentyears.Developingcountries:FocusonliberalizationandinvestmentattractionTheliberalizationoftheelectricitysectorisanimportantsteptoallowprivateinvestmentinrenewableenergy.TheaverageFDIrestrictivenessindexfortheelectricitysectorofnon-OECDcountriesshowsanincreaseinliberalizationoverthelastdecade(FigureB.1).Thistrendreflectsthecontinuedopeningoftheelectricitysectortoinvestment,ledbytheliberalizationoftheChineseandRussianelectricitymarkets.TABLEOF7CONTENTSINTERNATIONALINVESTMENTINCLIMATECHANGEADAPTATIONANDMITIGATIONFigureB.1.FDIregulatoryrestrictivenessindexintheelectricitysector,bygroupofcountries,2010-2020(average)2010201520200.1340.1110.1110.1140.1140.093OECDcountries* Non-OECDcountriesSource:OECDStat,FDIregulatoryrestrictivenessindexdatabaseNote:*OECDcountriesin2022areconsideredOECDcountriesforthewholeperiodanalyzedInthiscontext,itisnotsurprisingthatabout30percentofpolicymeasuresadoptedinclimatechange-relatedsectorsindevelopingcountriesbetween2010and2022concernliberalization(FigureB.2).TheseincludedtheunbundlingoftheenergymarketandtheprivatizationofSOEs(15measuresintotal).Privati-zationmeasuresconcernedprimarilytheelectricityandwatersectors.BasedontheanalysisoftheInvest-mentPolicyMonitordatabase,7developingcountries(China,Ethiopia,India,Indonesia,Syria,Türkiye,andtheUnitedArabEmirates)adoptedmeasurestoopentheirelectricitymarkettoprivateand/orforeigninvestmentduringthelastdecade,whilethePhilippinesandtheUnitedArabEmirateshavealsoadoptedmeasurestospecificallyopentherenewableenergysectortoforeigninvestors.RestrictivemeasuresaffectingFDIinclimatechange-relatedsectorswerelessfrequent.Theyincludedthenationalizationofelectricitycompanies(3measures),andtheintroductionofscreeningmechanismsorotherrestrictions(3measures),suchastheprohibitionofforeigninvestmentinspecifiedactivities(e.g.drinkingwater).Otherpoliciesadoptedbydevelopingcountriesaimedmainlytoattractinvestmentthroughincentivesandinvestmentfacilitationinclimatechange-relatedsectors(FigureB.2).Suchpoliciesaccountfor43percentofmeasurestakenbetween2010andJune2022(24measures).FigureB.2.Developingeconomies:investmentpolicymeasuresinclimatechange-relatedsectors,2010-2022(numberofmeasures)24155533IncentivesandLiberalization,ScreeningandEnvironmentalNationalizationOtherfacilitationincludingotherregulationsmeasuresprivatizationofrestrictionsSOESource:UNCTAD’sInvestmentPolicyMonitorTABLEOF8CONTENTSINTERNATIONALINVESTMENTINCLIMATECHANGEOutofthe24policymeasuresaimingtopromoteinvestmentinclimatechange-relatedsectorsadoptedbydevelopingcountries,42percentconcernedspecificallyinvestmentinrenewableenergyand37percentaimedtopromoteandfacilitateinvestmentingreensectorsandtechnologiesingeneral.Thislattercategoryincludes,forexample,thepromotionofFDIinenergy-savingandenvironmentaltechnologiesortaxincentiveprogrammesinsupportofgreenindustries.Finally,21percentofthese24policymeasuresconcernthepromotionofinvestmentintheelectricityand/orwatersectoringeneral(FigureB.3).Theseincentivesandpromotionmechanismsvarydependingoncountriesandtargetedsectors(forrelatedexamples,seeUNCTAD,2022d).FigureB.3.Developingcountries:Investmentincentivesandpromotionmeasuresbysector,2010-2022(percentage)ElectriciyRenewableand/orwater21%energy42%Promotionofgreensectorsand/ortechnologies37%Source:UNCTAD’sInvestmentPolicyMonitorFinally,severaldevelopingcountriesadoptedenvironmentalregulationsorothermeasurestoenhancesustainability.TheseincludetheadoptionofacarbontaxbySouthAfrica(2019),theenactmentofalawonpriorconsultationinenvironmentallysensitiveinvestmentprojectsbyPeru(2012),ortheissuingbythePhilippinesofanexecutiveordertoensurethattheenvironmentalstandardsinminingarefullyenforced(2012).OtherrelevantmeasuresincludedthecreationofguidelinesforsustainableoutwardFDIbyChi-nesecompaniesreleasedbytheChineseGovernment(2013),andtheintroductionofarisk-basedbusi-nesslicensingsysteminIndonesia(2021).Developedeconomies:HeightednationalsecurityconcernsunderpintighterinvestmentregulationElectricitygenerationandtransmissionandwatersupplyareamongthecriticalsectorsusuallyprotectedbyFDIscreeningmechanisms,fallingunderthegeneraltermof“criticalinfrastructure”.Withthegrowingimportanceofrenewablesintheirenergymix,severaldevelopedcountrieshavebroadenedthescopeofcriticalindustriesandtechnologiestoexplicitlyincludecleanenergy,energystoragesystemsorenviron-mentaltechnologies.Asaresult,73percentoftheidentifiedpolicymeasuresconcerningthesesectorsindevelopedeconomieswererelatedtotheintroductionorexpansionofFDIscreeningmechanisms(FigureB.4).TABLEOF9CONTENTSINTERNATIONALINVESTMENTINCLIMATECHANGEADAPTATIONANDMITIGATIONFigureB.4.Investmentpolicymeasuresinclimatechange-relatedsectors,2010-2022(numberofmeasures)135435ScreeningOtherpolicies1DevelopedDevelopingeconomieseconomiesSource:UNCTAD’sInvestmentPolicyMonitorInparticular,22countriestookmeasuresrelatedtoscreeningmechanismsinclimatechange-relatedsec-torsintheperiodunderconsideration,including:Australia,Canada,Israel,Japan,theUnitedKingdom,theUnitedStates,andseveralEuropeanUnioncountries(forexamples,seeUNCTAD,2022d).Chinawastheonlydevelopingcountrythatadoptedscreeningmeasuresrelatedtoclimatechange-relatedsectorsintheperiod.ThetrendtowardsincreasedcontrolsonFDIinclimatechange-relatedsectorsisalsoreflectedintheFDIrestrictivenessindex.ForOECDcountries,theaverageindexintheelectricitysectorhasbeenrelativelystableinthelastdecade(FigureB.1),asmostdevelopedeconomieshadalreadyliberalizedthesectorbefore2010.InEurope,forexample,theliberalizationoftheelectricitymarketstartedinthe1990s.Theaverageindexfor2020,however,showsaslightincreaseinFDIrestrictions,explainedbythescreeningpoliciesthathavebeenputinplaceinmanydevelopingeconomies.ThistrendislikelytocontinueinlightoftheenergysecurityconcernsraisedbythewarinUkraineanditsimpactonenergysupplyandprices.1Indevelopedeconomies,non-screeningmeasuresadoptedinclimatechange-relatedsectorsbetween2010and2022concernmainlythefurtherliberalizationoftheelectricitymarketthroughtheprivatizationoftheremainingSOEs(6measures),followedbytheintroductionofinvestmentincentivesforthepromo-tionofgreensectorsandtechnologies,includingrenewableenergy(4measures).OthermeasuresincludetherevokingofthelicenseofaforeignpowerfirminAlbaniaaswellasthereformoftherenewableenergysubsidiesinSpainandintheUnitedKingdomin2013,tobetteralignthemwithtechnologymaturityandpoliticalprioritiesrespectively(FigureB.5).InJuly2022,forinstance,theGovernmentofFranceannounceditsintentiontotakefullcontrolofthepowercompanyEDFinadealworth$9.8billion.TheGovernmentintendstohold100percentofEDF’sshares,com-paredwiththe84percentitownscurrently.TheMinistryofEconomyandF