LIST OF TABLES, FIGURES, AND BOXES  vii

ABBREVIATIONS  xi

ACKNOWLEDGMENTS  xii

FOREWORD  xiv

PREFACE  xvi

EXECUTIVE SUMMARY  xviii

1 OVERVIEW: TRANSFORMING FOR NET ZERO  1

1.1 The Transformation Challenge and Role of Infrastructure  1

1.2 State Capacity as a Driver for Change  2

1.3 Risk Sharing and Governance of the Private Sector  3

1.4 Accelerating Innovations for Transition  3

1.5 Transforming through Cooperation  4

2 STATE CAPACITY AND CLIMATE ACTIONS  5

2.1 How Resilient Are Economies to Climate Change Hazards?  5

2.2 What Is State Capacity and Why Does It Matter?  6

2.3 Capable States, Improved Climate Actions  8

2.4 Three Central Institutional Challenges Facing States  9

2.5 The Way Forward  13

2.6 Concluding Remarks  14

3 ENABLING PPPS AND THE PRIVATE SECTOR FOR NET ZERO  18

3.1 Overview of PPPs and Private Sector Infrastructure Investments  19

3.2 PPPs: A Vital but Still Imperfect Tool for Green Infrastructure in Asia  22

3.3 Improving Institutional Factors to Drive Renewable PPPs  27

3.4 Conclusion  34

4 MOBILIZING DEVELOPMENT FINANCE AND INVESTMENTS THROUGH STATE-OWNED ENTERPRISES  36

4.1 SOEs in EMDE Markets: Still Considerable Investment into Fossil Fuel Infrastructure  37

4.2 SOE Financing Advantage Seen Especially in Bond Markets  40

4.3 SOEs' Particular Responsibilities for Net-Zero Transition  44

4.4 Legacy to Leadership: Harnessing Financial Advantage toward Green Development  45

5 STATE-OWNED FINANCIAL INSTITUTIONS AND THE GREEN TRANSITION  48

5.1 Public Banks Today and Rationale  49

5.2 The Need for Governance Reforms  51

5.3 Public Banks as Climate Policy Levers  51

5.4 Public Banks as Partners and Cofinanciers of Infrastructure  59

6 ACCELERATING INNOVATION CAPACITY AND TECHNOLOGY ADOPTION FOR NET ZERO  62

6.1 Innovation in Fossil Fuel Production Coupled with Carbon Capture  63

6.2 Shifting toward Net-Zero Innovations and New Markets  66

6.3 International Cooperation  66

6.4 Innovation across Electricity Networks  69

6.5 Policy Considerations to Accelerate Green Technology  70

7 CHINA'S POLICY REFORMS AND PROGRESS TOWARD CARBON NEUTRALITY  74

7.1 The Entrepreneurial State: Key to Efficiency and Environmental Performance  75

7.2 Dynamic Private Players Rising through Environmental PPPs  80

7.3 Achieving Carbon Neutrality: Coordinated Market and Planning Instruments  86

8 INDIA'S TRANSITION TO NET ZERO: ROLE OF THE STATE AND THE PRIVATE SECTOR  92

8.1 Private Sector Leading Decarbonization Efforts but More Needs to be Done  94

8.2 SOEs Yet to Provide Strategic Net Zero Push  100

8.3 Financing for Green Transition Remains at a Nascent Stage  108

8.4 Conclusion  110

9 INDONESIA'S STATE AND PRIVATE SECTOR: UNDERPINNINGS FOR NET ZERO  112

9.1 The Entrepreneurial State Dominant in Infrastructure  113

9.2 Dynamic Private Players Lack in Renewable PPPs  117

9.3 Moving toward Net Zero: Markets and Green Innovation  124

10 MOONSHOTS FOR THE EMERGING WORLD  130

APPENDICES  132

Appendix 1 Identification of SOEs and Merging with Transactions  132

Appendix 2 ORBIS Intellectual Property Database Methodology  134

Appendix 3 Data and Methodology of Quantitative Analyses in Chapter 7  138

Appendix 4 Definition of SOEs in Chapter 8 and Summary Statistics  142

Appendix 5 Data and Methodology of Quantitative Analyses in Chapter 9  143

REFERENCES  145