Green Growth and Sustainable Development ForumHow to Unlock Investment in Support of Green Growth6 December 2013 OECD Paris 02004006008001000120014001600 20002010202020302040205020602070208020902100 ID: 846009
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1 Supporting Investment in Clean Energy In
Supporting Investment in Clean Energy InfrastructureDr. Brian P. Flannery, ChairInternational Business Green Economies Dialogue (BIAC)Joint Global Change Research InstituteResources for the Future Green Growth and Sustainable Development ForumHow to Unlock Investment in Support of Green Growth?6 December 2013 OECD, Paris 02004006008001000120014001600 20002010202020302040205020602070208020902100 Year Exajoules/Year Non-Biomass Renewables Nuclear Commercial Biomass Coal Natural
2 Gas Oil Global Primary Energy: Referenc
Gas Oil Global Primary Energy: Reference MIT 2007 Scenario without climate/carbon policy 02004006008001000120014001600 20002010202020302040205020602070208020902100 Year Energy Exajoules/Year Reduction from Reference Non-Biomass Renewables Nuclear Commercial Biomass Coal + CCS Coal Natural Gas + CCS Natural Gas Oil MIT Stabilization Scenario MIT 2007 Scenario with economists’ “ideal” climate policy Biofuels CCS Reduced Demand Investment Decisions and Green Gr
3 owth Policy Decisions on major capital e
owth Policy Decisions on major capital expenditures by private firms are based on a riskadjusted expectation of adequate returnsMany of the technology systems that show promise for green growth face high costs, limited or no commercial experience and political controversyHigher costs, potential for permitting or regulatory delays, public acceptance, and policy and legislative uncertainty add to perceived risks and raise costsInadequate returns force firms to seek alternate ap
4 proaches, defer decisions, or reject pro
proaches, defer decisions, or reject projectsEffective policies will need to work with mainstream project investment and finance processes, and with local and national approval processesBusiness seeks sufficient clarity to plan, propose and implement projects with confidence that they will be commercially viable and proceed in a timely fashion The key issue for investment is building confidence in returns from successful projects Establish stable policy/regulatory environment
5 Build societal capacity Education/traini
Build societal capacity Education/training especially in science and engineeringFundamental ResearchInfrastructureCreate enabling frameworksGovernance and rule of lawIntellectual Property RightsInvestmentTechnology deploymentTechnology transferEfficient and predictable regulatory and permit processesGovernment Role Take Away Messages Largescale investments that diffuse and transfer technology occur continuously using a variety of existing processesGreen growth policies need t
6 o leverage mainstream business activitie
o leverage mainstream business activities, not create a separate playing field for “green investments”In consulting business on finance, engage with operating companies as well as financial firms (and be aware that many firms selffinance their investments)Regulatory and permitting delays add costs and can tie up projects for years, try to expedite the investment process rather than add new complexity Private firms make investment decisions based on risk adjusted exp
7 ectation of returns; without adequate re
ectation of returns; without adequate returns they will not invest Orientation points for discussion What makes clean energy investment different from fossilfuel based traditional investment? Should green growth considerations be systematically integrated into energy investment projects? How do specific policies and regulations such as carbon pricing schemes and other investment incentives and disincentives influence the viability of clean energy investments? To what extent
8 does the promotion of investment policy
does the promotion of investment policy principles (such as nondiscrimination, investor protection and transparency) encourage private investment in clean energy infrastructure? How do other business climaterelated policies influence clean energy investment? Do international investors face specific barriers to clean energy investment? When does a clean energy investment contribute to economic growth?Do clean energy investments distort international competition? Thank You