Tag Archives: policy

Why risk coverage matters and what can be done to scale up green investment

December 6, 2013 |

 

Risk, whether real or perceived, matters. It is the biggest barrier preventing private capital from flowing into investments and, given the enhanced risk profile of low-carbon technologies, it is even more crucial for climate finance investments. Higher risks demand higher returns and higher financing costs, making low-carbon technologies even less competitive.

While not all risks need to be reallocated, whenever risk falls onto a party not suited or not willing to bear it, risk coverage instruments (such as guarantees) can be key to unlocking private resources without depleting public budgets.

CPI has observed this phenomenon time and time again in our case studies.

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COP19: A video primer on global climate finance with Barbara Buchner

November 21, 2013 |

 

The report says $359 billion has already been spent this year, but it is less than last year.

The bulk of the money (62%) comes from the private sector, enabled by public activities and most of the money has gone towards renewable energy. $22 billion has been spent of adaptation and $32 billion on energy efficiency.

This video interview was recorded, produced, and originally published by Responding to Climate Change.

Read “The Global Landscape of Climate Finance 2013.”

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Will California’s AB327 help or hinder renewable energy? The devil is in the details

November 18, 2013 |

 

California Assembly Bill 327 (AB327), signed into law October 7th, 2013, drew fire from solar and energy efficiency proponents, The Sierra Club, and other environmental groups over the rate-setting powers it would give the California Public Utilities Commission (CPUC). These opponents worry that the bill allows changes in rate and regulatory structure that could discourage renewable energy investment in California. However, local governments, industry groups, utilities and some consumer groups argue these same powers could, used wisely, make electricity rates more equitable, protect consumers and help utilities adapt to an increasingly renewable and distributed grid. Climate Policy Initiative’s analysis suggests they could also create a very fertile and cost-effective environment for renewable energy for years to come.

AB327 allows the extension of the Renewable Portfolio Standard (RPS) and requires the extension of the Net Energy Metering program, both of which Climate Policy Initiative analysis has shown to be significant drivers of renewable energy growth in California. Many of the details of their implementation are left to the CPUC, though, and these details will decide the ultimate impact of AB327 on renewable energy in California.

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How to spread new technology in agriculture: the importance of geographic conditions and learning-from-peers

November 7, 2013 |

 

In business, it is unusual to find a technology that proves to be better and costs less than the one in use. In theory, that technology should spread like wildfire and quickly replace current production methods. If it doesn’t, there is usually a barrier that prevents its spread.

In a new CPI study, we examine a farming technology called the Direct Planting System (DPS) which has proven to be one of the most important developments in agriculture in the past decades – however, after nearly forty years of its introduction in Southern Brazil, only 10% of Brazilian farmers reported using it in the 2006 Agricultural Census. The questions we address in this study are: What is keeping this technology from spreading and how do we overcome this barrier?

Our analysis reveals that soil composition is an important factor affecting the spread of the DPS. When soils are similar in a given municipality, it is easier for farmers to learn from the experience of peers who have already successfully adopted the system. Likewise, differences in the soil can act as a barrier to the expansion of DPS, since the system would have to be adapted to different soils. 

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A Wish List for IPCC: “Policy-Ready” Climate Science

October 9, 2013 |

 

Last week’s release of the IPCC Working Group I’s contribution to the Fifth Assessment Report (AR5) prompted a moment of self-reflection for the climate community.

It reported incremental gains in the scientific community’s confidence in its findings, with a few important tweaks to past findings. For example, it is now extremely likely (rather than just very likely) that human influence has been the dominant cause of observed warming since the mid-20th century (see C2ES’s table of increasing certainty). The Working Group also significantly revised the upper bound of their sea level rise estimates (see Nature’s News Feature on this topic).

However, there is a feeling that we have reached a point of diminishing returns in our current lines of inquiry. As a recent Nature editorial pointed out, comprehensive assessments of climate science may no longer represent the best use of our resources; continued investment in the IPCC process as it stands may result in smaller policy-relevant returns over time. We should feel a great sense of achievement and satisfaction at having reached this point. However, we may also need to sit back in our chairs, grab some old-fashioned writing implements, and reframe our questions.

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India’s Solar Mission is making good progress for solar PV but not for solar thermal

August 28, 2013 |

 

Gireesh Shrimali is an Assistant Professor of Energy Economics and Business at the Monterey Institute of International Studies and a Fellow at Climate Policy Initiative.

In 2010, India set an ambitious target to develop 20,000 MW of solar energy by 2022.

This target, implemented through the Jawaharlal Nehru National Solar Mission, called the Solar Mission hereafter, was to be achieved in three phases: Phase 1 by early 2013; Phase 2 by 2017; and Phase 3 by 2022. The Phase 1 was to be implemented in two batches: Batch 1 with capacity targets for solar PV and solar thermal; and Batch 2 with a capacity target for solar PV only.

As of June 2013, it appears that the Solar Mission has been moderately successful in deploying solar PV. Based on metrics developed in a recent paper with Vijay Nekkalapudi (submitted to Energy Policy), “How Effective Has India’s Solar Mission Been in Reaching Its Deployment Targets,” where we looked into the effectiveness of the Solar Mission in achieving its targets and offer suggestions for improving its design, the performance of the Solar Mission has been 8.4 on a 10 point scale.

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China’s Path to Low-Carbon Development: A Q&A with Thomas C. Heller

August 14, 2013 |

 

This interview discussing the challenges China faces on its path to low-carbon development  and parallels with other countries’ experiences first appeared in Mandarin in the China Economic Times. In it, our executive director, Thomas C. Heller, references CPI’s recent publication The Policy Climate, which presents 30 years of climate and energy policy in China, Brazil, India, the EU, and the U.S..

Reporter: Why did you undertake this report and what was most surprising about your findings?

Heller: A lot of the attention to date has been on international climate negotiations, but actually, there’s more action at the national level. We wanted to examine climate and energy policies in key regions around the world, and share lessons about their experience. It was interesting to see how much nations had in common. All nations want green growth. And they face the same choices about how to get there. China has a very different governance and economic system from other countries, but like other countries, it faces the same decisions on how to balance national and regional policies, whether to use mandates or incentives, how to target large as well as small enterprises. Our report talks about some of these common challenges.

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Land use policy in Brazil: A brief video overview

July 30, 2013 |

 

In this brief video, CPI senior analyst Clarissa Costalonga e Gandour discusses land use policy in Brazil in the context of deforestation, climate change, and economic growth.

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What’s working and what’s not in state renewable portfolio standards

July 11, 2013 |

 

Combined renewable portfolio standards in the United StatesRenewable portfolio standards (RPS) are an important part of the U.S. renewable energy policy landscape.Twenty-nine states, from California to North Carolina, have enacted these policies to require utilities to provide at least some of their power from renewable sources. This year, at least fourteen of these states considered bills that would have watered down or repealed these policies. But these rollbacks proved to be unpopular, and on balance state legislatures have made RPS policies more ambitious in 2013.

Taken together, RPS policies will require nearly 10% of electricity sold in the U.S. to come from renewable sources by 2020. And with the help of federal tax credits, grants and loan guarantees, most RPS policies appear to have had limited impacts on electricity rates so far. But every state’s RPS is different, and the diversity of policy designs is a great opportunity to learn what is working well and what can be improved in these policies.

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Could one of the cheapest Concentrated Solar Power plants be a turning point for this technology?

July 2, 2013 |

 

Has Concentrated Solar Power (CSP) finally turned the corner, going from an emerging technology (albeit with 20 years of history) to an (almost) commercially-ready one?

Ouarzazate I CSP less expensive than average CSP plant

CPI recently published an update to an earlier report on a large-scale CSP plant to be built near the city of Ouarzazate in Morocco. CPI finds that the project has apparently broken two taboos with the successful completion of its financing: the widely held view that a large scale infrastructure project could not be financed within its planned budget, even more so in an emerging economy; and that technology costs for CSP could not come down from the USD 6000/KW mark where they have been stuck since the ‘90s.

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