A new study by the Global Climate Network shows that more investment by developed nations in clean energy technologies such as wind and solar power for developing nations is crucial to meet climate and energy related targets.
They study, called Investing in Clean Energy, has found that investment in clean energy must increase from USD $34 billion in 2009 to an average of $63.6 billion a year between 2010 and 2020.
Excluding China, the average annual investment needed is $15.93 billion but the current gap is around $15.73 billion. India, South Africa and Nigeria are currently only investing $0.2 billion, a drop in the bucket compared to government goals.
In order to meet the $63.6 billion goal annually, GCN says developed countries need to provide up front finance and loan guarantees in order to ensure private investor confidence. The Global Climate network says that for every $1 of public finance properly invested could leverage up to $10 from the private sector.
According to Professor Pan Jiahua, Director of the Research Centre for Sustainable Development in Beijing and GCN member:
“The massive up front costs of shifting to clean energy require that private investors in the world’s major capital markets take the opportunities seriously. For that to happen, financial incentives are needed for pump-priming to reduce what the private sector still sees as a risky market without enough promise of reward.”
The GCN has called on governments, including Australia’s, to set aside a chunk of the finance pledged at last year’s Copenhagen climate summit to help generate private investment. At Copenhagen, Australian had pledged USD $243 million/year in 2010 & 2011 and $140 million in 2012.
The Global Climate Network (GCN) is a collaboration of research and policy organisation from across the world and includes Australian think-tank, The Climate Institute.
