SCALING UP CLEAN ENERGY INVESTMENT

THE PROBLEM

Significant additional investment is required to support clean energy technologies in developing countries and thereby constrain climate change and provide a basis for sustainable development. If current financing levels are to be scaled-up, the private sector will have to be a key partner as it is responsible for the allocation of the majority of global financial resources. But there is currently a gap between the investment requirement and the availability of appropriate funds.
Not all private sector financiers are aware of investment opportunities related to clean technologies in developing countries. This is where public sector programmes can play a role to reduce private investors perceived risks such as uncertainties over local markets, governance, infrastructure and available resources. Public sector involvement is often crucial to attracting large-scale private sector finance. Despite acknowledgement of the likely benefits, the gap between potential public and private sector financiers of clean technologies remains very wide.

THE SOLUTION

Governments can show the commercial viability of clean energy and reduce perceived risks by covering some of the start-up costs and/or setting up demonstration projects to show investors that projects are truly “bankable.”
UNEP’s Energy Finance programme activities take many different approaches – often simultaneously – according to the specific needs of the country and the project. For example, sometimes lowering costs for consumers can stimulate a new market and attract financing, and a facility can be set up to help local banks provide low-cost loans to clean tech users.
At other times, countries would like to attract finance to increase the viability of clean technology applications by participating in the global carbon market, but need technical support and guidance on the appropriate carbon finance mechanisms.
Other UNEP interventions offer training for financial institutions in developing countries geared at improving the prospects for clean technology projects, or financial support to suppliers and developers to help get lowcarbon projects up and running.

IMPACTS

Despite the difficult global economic conditions during 2012, many UNEP initiatives have made great positive impacts by scaling-up the level of investment in clean technologies.
For example:

• UNEP’s Climate Finance Innovation Facility provided technical assistance of US$150,000 to the Bank of Taizhou in China to help develop an energy efficiency loan product. The actual investment made by the bank was US$3,269,500.
• UNEP’s Seed Capital Assistance Facility supported an 80MW wind farm in South Africa and a 10MW hydropower project in Tanzania. UNEP funding of US$315,000 for these projects has mobilised private investment of US$1.5m and potential follow-on investment of around US$14m.

SUPPORT

UNEP’s Energy Finance Unit works closely with Frankfurt School – UNEP Collaborating Centre for Climate and Sustainable Energy Finance, to offer extensive climate finance skills and services. The initiative is supported by a range of donors including the governments of France, Germany, Italy, and Sweden.

WEBSITE

• www.unep.org/energy/activities/financialinnovation.aspx

SUCCESS STORY
Seed Capital Assistance Facility (SCAF)
In many developing countries entrepreneurs can transform markets, but entrepreneurs face a number of challenges doing so in the clean energy sector. A lack of early stage financing, high transaction costs and insufficient risk-adjusted returns are just some of them.
SCAF was designed to help overcome these obstacles, offering cost-sharing support to clean energy fund managers to co-invest seed financing in early stage project developments. An example is the South African Evolution One Fund, Africa’s first specialised “clean tech” investment fund with approximately US$90 million in committed capital. US$1 million of funding from SCAF is being matched by US$5 million from Evolution One Fund to develop and invest seed capital in a growing portfolio of renewable energy projects in Southern Africa.

Source: Re-blogged from http://www.unep.org

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CLEAR WIN FOR CLEAN TECHNOLOGY IN THE MEDITERRANEAN

THE PROBLEM

Although small scale renewable energy technologies, such as photovoltaic systems and solar water heaters (SWH), are considered reliable and competitive, they are still not fully established in the Southern and Eastern Mediterranean region due to the high upfront cost for the end-users, and the lack of financing options tailored for this type of investment.

THE SOLUTION

The Mediterranean Investment Facility (MIF) helps to establish innovative financing mechanisms to allow end-users to invest in renewable energies.
The integrated approach is based on:

1. Financing mechanism design, implementation and monitoring
2. Training and capacity building for government officials, financing institutions as well as for technology suppliers and installers
3. Quality control and checking system to select equipment complying with international standards and to check the operation of the systems

THE IMPACTS

• More than 145,100 households now get their hot water exclusively from the sun in Tunisia, thanks to the country’s solar water heater programme for the residential sector – PROSOL – that has created a sustainable market for solar water heaters, with 50 technology suppliers and more than 3,000 direct jobs.
• Since the launch of the photovoltaic project for the residential sector in Tunisia – PROSOL ELEC – in 2011, more than 740 families have installed photovoltaic systems.
• In the tertiary sector, particularly in the hotel sector, 24 collective solar water heaters were installed in Tunisia and Egypt corresponding to more than two million kilowatt-hours of solar energy produced every year.
• Detailed studies are ongoing in Tunisia to set a sound regulatory framework to integrate solar thermal energy in the industrial sector.
• An innovative financing support mechanism in Morocco enables two million households to phase out incandescent lighting and repay the cost of new energy-efficient lamps through their electricity bill over 21 months.
• In Montenegro, free loans to end-users are provided through local commercial banks over a period of seven years to install solar water heaters.

SUPPORT

Italian Ministry of Environment, Land and Sea

WEBSITE

• www.unep.org/energy/Activities/MediterraneanInvestmentFacilityMIF.aspx

SUCCESS STORY

Within the MIF, PROSOL provides financial support to local households through a combination of value added tax exemptions, customs duty reductions and reduced-rate bank loans. The repayment of the loan is included in the regular electricity bill, which lowers the risk for local banks that are then willing to finance SWH projects with reduced interest rates.
An interest rate subsidy was available during the first phase of PROSOL (2005-2006) that reduced the interest rate of the loan to zero per cent for the final end user. The Tunisian government provides a subsidy of 20 per cent of the system cost. This was initially a temporary measure funded by UNEP to “prime” the market, but was later made permanent by the Tunisian government. Thanks to PROSOL more than 80.000m² of solar collectors are installed every year.

Source: Re-blogged from http://www.unep.org

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CLIMATE AND CLEAN AIR COALITION TO REDUCE SHORT-LIVED CLIMATE POLLUTANTS

THE PROBLEM

Short-lived climate pollutants (SLCPs) are agents that have relatively short lifetime in the atmosphere – a few days to a few decades – and a warming influence on climate. These short-lived climate pollutants are also dangerous air pollutants, responsible for various detrimental impacts on human health, agriculture and ecosystems. Key SLCPs, including methane, black carbon, tropospheric ozone, and many hydrofluorocarbons, are responsible for a substantial fraction of near term climate change, with a particularly large impact in sensitive regions of the world. Science has built a powerful case for action to reduce SLCPs. A UNEP 2011 report shows that fast action to reduce these pollutants could slow down the warming expected by 2050 by as much as 0.5°C. It is estimated this would prevent over two million premature deaths annually and avoid annual crop losses of over 30 million tons. While fast action to mitigate SLCPs could help slow the rate of global warming and avoid exceeding the 2°C target in the near-term, long-term climate protection will only be possible if deep and sustained cuts in carbon dioxide emissions are made quickly.

THE SOLUTION

In February 2012, UNEP together with the governments of Bangladesh, Canada, Ghana, Mexico, Sweden and the United States, launched the Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants (CCAC): the first global effort to treat SLCPs as an urgent and collective challenge.
Through this voluntary effort, governments, intergovernmental organizations, NGOs and civil society are working together to accelerate and scale-up action, catalyze new actions as well as highlight and bolster existing efforts to address SLCPs. All CCAC Partners, which now number over thirty,recognize that the work of the Coalition is complementary to global action to reduce carbon dioxide, in particular efforts under the UNFCCC.

THE IMPACTS

The CCAC Partners have identified seven initiatives for rapid implementation by the Coalition that will ensure fast delivery of scaled-up climate and clean air benefits, including: Reducing Black Carbon Emissions from Heavy Duty Diesel Vehicles and Engines; Mitigating Black Carbon and Other Pollutants from Brick Production; Mitigating SLCPs from the Municipal Solid Waste Sector; Promoting HFC Alternative Technology and Standards; Accelerating Methane and Black Carbon Reductions from Oil and Natural Gas Production; Promoting SLCP National Action Planning (NAPs); and Financing Mitigation of SLCPs. First actions under these initiatives are underway, with the first results expected in March 2013.

SUPPORT

The Coalition is growing rapidly. As of November 2012, it had 36 Partners. Financial support for the Coalition comes from Canada, Germany, the European Commission, Norway, Sweden and the United States of America.

WEBSITE

• www.unep.org/ccac

SUCCESS STORY

Mitigating black carbon from brick production
The CCAC identified traditional brick production as an area where substantial emissions reductions can be achieved for black carbon, toxics and other pollutants. Recent studies show that implementing more efficient technologies can result in reductions in pollutant emissions of 10 – 50 per cent, depending on the process, scale and fuel used. In a pilot phase to be completed by March 2013, the Coalition is focusing on raising the profile of emissions of SLCPs from inefficient brick production on national governments’ agendas to catalyze political engagement and action. Public policies to reduce the environmental impacts of artisanal brick production will be examined, and the characteristics of current brick production will be determined for Africa, Asia, and Latin America, covering the technology, fuels, practices and socio-economic conditions.

Source : Re-blogged from http://www.unep.org

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MAKING THE BUILDING SECTOR CLIMATE FRIENDLY

THE PROBLEM

The building sector accounts for up to 30 per cent of global annual greenhouse gas emissions and consumes up to 40 per cent of all energy. It also provides the greatest potential for significantly cutting emissions, at low cost, in both developed and developing countries.
Collectively the building sector is responsible for about 40 per cent of global resource consumption, including 12 per cent of all fresh-water use, and produces up to 40 per cent of our solid waste. The sector is estimated to be worth 10 per cent of global GDP (USD7.5 trillion) and employs 111 million people. With urbanization increasing in the world’s most populous countries, building sustainably is essential to achieving climate mitigation and sustainable development.

THE SOLUTION

UNEP launched the Sustainable Buildings and Climate Initiative (SBCI) in 2006 to promote sustainable building and construction practices. The initiative has nearly 50 partners and collaborators representing all segments of the building sector, including contractors and developers, designers and engineers, local and national authorities, real estate companies, Green Building councils, professional associations and other non-governmental organizations. UNEP-SBCI draws on UNEP’s capacity to provide a global platform for collective action, utilizing its network and partnerships to develop reports, tools, and methodologies to promote sustainable building policies and practices.
Tools developed by UNEP-SBCI include:

• the Common Carbon Metric (CCM), a protocol for measuring energy consumption and calculating greenhouse gas emissions from building operations that is intended to meet international Measurable, Reportable, and Verifiable (MRV) standards
• the Quick Scan Policy Tool, developed in conjunction with the Central European University as an online platform for policymakers to assess their policy environment and develop policy packages to strengthen sustainable building practices in their jurisdictions.
• “State of Play” reports on sustainable buildings in India, France, several countries in Southeast Asia and more data-intensive “Baseline Emission and Reduction Potential” reports for South Africa and Mexico, with more reports in progress for the United States and Colombia.

THE IMPACTS

The work of UNEP-SBCI, including the initiative’s tools and strategies is informing policy-making worldwide. The Common Carbon Metric (CCM) has become the basis for a new international standard to measure the climate impact of building operations currently being developed by the International Organisation for Standardisation (ISO). This effort will result in a better understanding of energy consumption and GHG emissions from buildings, and provide a globally applicable methodology for measurement and reporting. UNEP has incorporated the CCM in a project proposal to assist governments in Asia to develop Nationally Appropriate Mitigation Actions (NAMA) for the building sector.

SUPPORT

Private sector companies, government and local authorities, non-governmental organizations and research institutions organizations, including the Central European University, the Gulf Organization for Research and Development in Qatar, the Institute for Industrial Sciences at the University of Tokyo, the T.C. Chan Center for Building Simulation and Energy Studies at the University of Pennsylvania, and the Center for a Sustainable Built Environment at New York University; Governments of Norway and Finland.

WEBSITE

• www.unep.org/sbci

SUCCESS STORY

In Malaysia, the Ministry of Energy Green Technology and Water has adopted the CCM tool for the building component of its Low Carbon Cities Framework and Assessment System (LCCF), applying it to buildings in Cyberjaya and with future plans to apply it in four other townships in Malaysia. The CCM assists in establishing a baseline so that the effectiveness of retrofits and policy interventions can be effectively measured.

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