There is a wide range of financial and economic mechanisms or instruments to facilitate investment in technologies and logistics solutions that reduce fuel use and emissions. These mechanisms have an impact on investment decisions or on an entity’s ability to invest by helping to reduce overall costs of the investment (easing the decision to invest) or by facilitating financing of the investment (reducing barriers to and costs of commercial financing).


Financing mechanisms can be policy-based or market-based as shown below:


Policy Based

> Tax (e.g., taxes and tax credits)
> Subsidies (e.g., subsidies and grants)


Market Based

> Debt financing or lending programs (e.g., bank loans, soft loans, revolving funds, guarantee funds, energy efficiency “bank windows”)
> Emission credits (e.g., clean development mechanism [CDM])
> Energy service companies (e.g., guaranteed savings, shared savings, pay from savings)