rights (IPRs) issues where the large RD&D investments needed for technical advances in certain clean energy technologies will be undermined by uncertain global IPR protection; (e) subsidies for conventional energy products at both the retail and production levels reduce to below-cost the price with which new energy technologies must compete; and (f) deployment of clean energy and energy efficient technologies is often hampered by trade barriers.

The types of such barriers will differ from country to country, a function of the many factors that shape national energy policies, including history, politics, and geography. The opportunities and obstacles will also vary significantly from country to country, and diagnostic studies could help to identify the full range of potential actions that are needed to help make clean energy investment more attractive to both domestic and foreign investors (Figure 1 provides an illustration of differences between generic investments barriers and those that are more specific to climate investments).

With the long-term goal of promoting and accelerating the implementation of climate mitigation technologies, this study aims to facilitate development of a policy framework for promoting sustainable investment climates for climate friendly investments in South Asia and elsewhere. The objective is twofold:

- Systematic evaluation and comparison of the enabling environments in SAR countries for supporting private sector investment in climate mitigation technologies.<sup>3</sup>

- Creation of a **climate investment readiness index (CIRI)** for South Asian countries and comparison with other countries globally.  CIRI is an attempt to benchmark countries in terms of their preparedness and maturity to move into the arena of climate-friendly investments. The CIRI goes beyond the more country-focused investment climate assessments and first such initiative that covers both renewable energy as well as energy efficiency.<sup>4</sup>

While the opportunities and obstacles will vary significantly from country to country, the new policy framework and CIRI will help country-level policymakers to identify the full range of actions needed to make clean energy investment more attractive to both domestic and foreign investors.

The index will also help these policymakers understand the institutional, regulatory, and legislative systems that need strengthening; how deficiencies in these systems may impede the flow of private investment in climate-friendly technologies; and the potential impact of various actions. The index will also aid countries in assessing their progress toward a low-energy/carbon growth path, and inform assistance and cooperative efforts.

> 3 While a number of other sectors such as transportation, agriculture, and forestry are also crucial from the perspective of attracting climate-friendly investments, the study focuses on the RE and EE sectors, because these are the sectors where private sector investment activity is particularly strong. Further investments in these sectors could also improve the investment climate for, e.g., clean transportation technologies such as electric vehicles.

> 4 There are other similar initiatives underway that attempt to capture/benchmark countries progress towards climate mitigation or clean energy policies and measures. Notable among them are IADB/Bloomberg‘s ClimateScope, American Council for an Energy-Efficient Economy (ACEE) report ranking countries on energy efficiency and World Energy Congress (WEC) Energy Policy Index, and EBRD‘s CLIM Index.

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