Financial Mechanisms for Environmental Compliance in Infrastructure Projects: CSF Discussion Paper - Number 5: June 2013

Energy and transportation infrastructure are building blocks of development. Energy is a key input to every industrial process, most agriculture and to the comfort of most people at all economic levels. Roads, railways and shipping permit trade, exploitation of comparative advantage and labor mobility. Governments, state banks and multilateral development banks play central roles in infrastructure projects, which have characteristics that deter free-market investment: long-term payoffs, substantial risk, natural monopolies and the notion that they provide services to which all people have a right, even if they cannot pay.