Tag Archives: policy

Obama’s climate plan and what it means for states

June 28, 2013 |

 

This post originally appeared on The Huffington Post.

In his climate speech this week, President Obama gave the go ahead for the U.S. Environmental Protection Agency (EPA) to develop national greenhouse gas standards for both new and existing power plants — making carbon regulation under the Clean Air Act the primary action of his broader plan to reduce U.S. carbon emissions.

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The next step for U.S. renewables is to drive low-cost private investment – and to do so as cost-effectively as possible

June 25, 2013 |

 

Today President Obama announced a goal to double renewable electricity generation by 2020 as part of a broader plan to tackle carbon pollution in the U.S.

Reaching this goal would add to the substantial renewable energy capacity the U.S. can already boast: Over the past five years, U.S. workers have built enough wind and solar farms to power over six million homes with clean energy. And in 2012, renewables comprised more than half of all new power generation in 2012 in the U.S. — surpassing all other sources including natural gas.

I recently worked with the American Council on Renewable Energy and CalCEF to look at the state of finance for renewable energy in the U.S. And in a paper released at the Renewable Energy Finance Forum – Wall Street today, we point out that this boom was enabled by the alignment of federal, state, and private interests: State-level renewable portfolio standards helped create a market for renewable electricity, federal incentives helped cover the incremental cost of that electricity, while private investors have contributed tens of billions of dollars to getting wind and solar off the ground.

So what’s the next step? What needs to happen to reach Obama’s targets?

We argue that the next step for U.S. renewable energy is to drive low-cost private investment — and to do so as cost-effectively as possibly.  CPI analysis points to five practical ways do this.

1. Maintain consistent, long-term policies by building on the success of current policy efforts. Catalyzing change in a highly regulated industry such as electricity is difficult.

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The role of risk in renewable energy deployment: A video overview

June 10, 2013 |

 

In this brief video, CPI senior director Barbara Buchner discusses the role of risk  in renewable energy deployment. She identifies opportunities for the public sector and development financial institutions to unlock capital for green investments.

Learn more about the role of risk in climate finance here: http://climatepolicyinitiative.org/publication/risk-gaps/

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Policy Watch: South Korea advances on cap and trade and world’s largest REDD project approved

June 4, 2013 |

 

This week, climate policy headlines from around the world include a new multinational renewable energy coalition, progress on cap-and-trade in South Korea, and the world’s largest REDD+ project moving forward in Indonesia.

Uday Varadarajan and Elinor Benamicontributed headlines to this edition of Policy Watch.

South Korea plans ambitious carbon market
South Korea’s government plans to meet in May with the nation’s biggest emitters to provide information about the start of cap and trade in 2015.

The government plans to select an exchange for greenhouse- gas emissions in the second half of this year and decide how to allocate free allowances to an estimated 480 emitters by June 2014, Lee Hyung Sup, a deputy-director at the Ministry of Environment, said in a phone interview yesterday in Seoul. Trials for carbon trading are set to start in June 2014, he said. Full article.

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Why policy matters for institutional investment in renewable energy

May 23, 2013 |

 

Institutional investors steward a large fraction of our society’s wealth. In OECD countries, pension funds, insurance companies, endowments, foundations, and sovereign wealth funds collectively manage over $45 trillion in assets ($71 trillion if you add in other investment managers and pension assets outside of pension funds). Needless to say, the financial security of these institutions is a matter of significant public importance.

Many of these institutions have investments in carbon-intensive assets – such as coal, oil, and gas extraction companies – which could have less value in a climate constrained world. Recently, policymakers, the public, and beneficiaries of these institutions have begun to call on institutions to divest from fossil fuels to reduce their exposure to this potential risk.

Another option may be to increase investment in low-carbon assets like renewable energy. To date, however, not much research has addressed the policy constraints on increasing institutional investment in low-carbon assets.

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Amidst Prop 39 discussions, what do California schools need?

May 21, 2013 |

 

California policymakers are considering how to allocate Proposition 39 funds — an estimated $2.75 billion over five years — to support energy efficiency and clean energy projects in K-12 schools and other public buildings. Proposition 39 presents a substantial opportunity to help school districts save energy and money.

In order to inform these ongoing discussions, CPI recently analyzed existing resources and gaps in financing energy-saving projects in K-12 school districts to try to get a sense of what school districts need.

In interviews with school district officials, we heard that California’s school districts are actively looking to cut energy costs amid intense budget pressures. Interest rates are currently very low, making many energy-saving projects financially viable. But many of the typical funding sources schools use for facility improvements are limited in availability, and districts are reluctant to take on debt to fill the gap. And many districts don’t have the staff resources and technical expertise to sort through sales pitches and figure out what projects to do.

Our analysis suggests that Proposition 39 funds can best drive energy savings in three ways:

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China at an energy crossroads

April 29, 2013 |

 

As the second largest economy in the world, China’s energy demand is growing at a speed never seen before, representing more than 80% of the growth in both oil and coal consumption internationally in the past few years. When a country is developing at this scale, anything it does will have huge implications on a variety of global issues, from energy markets, commodity prices, energy security, to climate change.

However, people trying to understand what energy path the country is heading toward are often puzzled by the complexity of the picture: On the one hand, the country is the biggest emitter and the largest net importer of coal. On the other, China also leads renewable energy manufacture and installation, and has helped push down the cost of renewable generation globally.

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National Development Banks can play a big role in climate finance

March 27, 2013 |

 

National Development Banks (NDBs) can play a big role in climate finance. In many cases, they already are: In CPI’s most recent estimate, NDBs, together with bilateral financial institutions, raised and channeled USD 54 billion in 2010/2011 to renewable energy, energy efficiency, and other climate-related measures.

The question is, could they do more? By raising and distributing international and national public climate finance in their respective local credit markets, NDBs have unique potential; their knowledge of and long-standing relationships with the local private sector put them in a privileged position to access local financial markets and understand local barriers to investment.

To answer this question with more certainty, Climate Policy Initiative recently contributed to a study promoted by the Inter-American Development Bank. The research aimed to understand the role NDBs could play in channeling and leveraging climate finance, and the conditions needed for them to be most effective.

Drawing from experiences of NDBs within the Latin American and Caribbean region, the study finds that while many NDBs are already piloting an array of financial and non-financial instruments to promote private ‘green’ investments, these institutions are at diverse stages of ‘readiness’ to fully promote climate-related programs. Many still need to build capacity, and to acquire experience in the preparation, risk assessment, evaluation, and monitoring of climate projects.

So, to come back to the earlier question – yes NDBs could do more, but decision makers should look for ways to support existing efforts, and consider the particular experience, characteristics, and potential of NDBs when developing policies and mechanisms for delivering climate finance on the ground.

For more information, check out the Inter-American Development Bank study.

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In India, Renewable Energy Certificates are missing the target

February 11, 2013 |

 

In 2008, India’s National Action Policy on Climate Change set a renewable portfolio standard, called the Renewable Purchase Obligation (RPO), to produce 15% of the country’s electricity with renewable energy sources by 2020. Further, under the Jawaharlal Nehru National Solar Mission, the Indian government aims to develop 20,000 MW of solar energy by 2022.

To help reach these ambitious targets in a cost-effective manner, India launched a market-based mechanism called Renewable Energy Certificates (RECs) in 2010.

However, in the one year of trading so far, participation in the REC markets has been low: RECs have failed to attract investment. Though the design of the REC mechanism appears adequate, the performance of the market has been far from satisfactory. This, along with other issues, such as the cost of debt, translates to real concerns over whether India is on track to meet its ambitious targets.

So why is this happening?

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Brazil’s deforestation and conservation policies: A quick video overview

January 31, 2013 |

 

In this short video, Juliano Assunção, Director of Climate Policy Initiative Rio, discusses Brazil’s deforestation and conservation policies.

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