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How Can We Pay for Green Growth? New Report Provides Answers

In a little more than one generation—by the time your grade-schoolers will be seeing their own kids off to school—our planet will be home to 9 billion people. This will create an unprecedented demand for water, food, and energy--and stress the supporting infrastructure required for life in the 21st century. How are we to meet this demand while respecting planetary boundaries? And importantly, how will we pay for it?

A recent publication by the Green Growth Action Alliance (G2A2), aims to provide some answers. WRI and others provided guidance, case studies, research, and data to the publication, The Green Investment Report: The ways and means to unlock private finance for green growth. The findings were discussed widely at the recent World Economic Forum meeting in Davos.

Under current OECD growth projections, the world will need to invest $5 trillion annually until 2020 in the water, agriculture, telecommunications, power, transport, buildings, industrial, and forestry sectors. However, solely delivering this investment to maintain “business-as-usual” economic growth will not lead the world onto a sustainable growth path. We need to find ways to “green” our growth to cope with resource scarcity and alleviate risks from climate change and environmental degradation. Greening this investment will require a mix of appropriate policies and capital. The lion’s share will need to come from the private sector, given the scale required.

The “Green Investment Report” estimates that an additional $700 billion will be needed annually to green the business-as-usual investment in the global economy. This is a large sum, but relatively insignificant compared to the cost of inaction as negative environmental impacts increasingly take their economic toll.

Why 2013 Could Be a Game-Changer on Climate

This piece originally appeared on CNN.com.

As leaders gather for the World Economic Forum in Davos today, signs of economic hope are upon us. The global economy is on the mend. Worldwide, the middle class is expanding by an estimated 100 million per year. And the quality of life for millions in Asia and Africa is growing at an unprecedented pace.

Threats abound, of course. One neglected risk--climate change--appears to at last be rising to the top of agendas in business and political circles. When the World Economic Forum recently asked 1,000 leaders from industry, government, academia, and civil society to rank risks over the coming decade for the Global Risks 2013 report, climate change was in the top three. And in his second inaugural address, President Obama identified climate change as a major priority for his Administration.

For good reason: last year was the hottest year on record for the continental United States, and records for extreme weather events were broken around the world. We are seeing more droughts, wildfires, and rising seas. The current U.S. drought will wipe out approximately 1 percent of the U.S. GDP and is on course to be the costliest natural disaster in U.S. history. Damage from Hurricane Sandy will cost another 0.5 percent of GDP. And a recent study found that the cost of climate change is about $1.2 trillion per year globally, or 1.6 percent of global GDP.

Shifting to low-carbon energy sources is critical to mitigating climate change's impacts. Today's global energy mix is changing rapidly, but is it heading in the right direction?

6 Top Environment and Development Stories to Watch in 2013

This post originally appeared on Bloomberg.com.

As we enter 2013, there are signs of growth and economic advancement around the world. The global middle class is booming. More people are moving into cities. And the quality of life for millions is improving at an unprecedented pace.

Yet, there are also stark warnings of mounting pressures on natural resources and the climate. Consider: 2012 was the hottest year on recordfor the continental United States. There have been 36 consecutive years in which global temperatures have been above normal. Carbon dioxide emissions are on the rise – last year the world added about 3 percent more carbon emissions to the atmosphere. All of these pressures are bringing more climate impacts: droughts, wildfires, rising seas, and intense storms.

All is not lost, but the window for action is rapidly closing. This decade--and this year--will be critical.

Against that backdrop, experts at WRI have analyzed trends, observations, and data to highlight six key environmental and development stories we’ll be watching in 2013.

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5 Reasons India Needs a Green Power Purchasing Group

With more than 400 million of its 1.2 billion citizens without access to electricity, India needs extensive energy development. A new initiative aims to ensure that a significant portion of this new power comes in the form of renewable energy.

The Green Power Market Development Group

Today, WRI and the Confederation of Indian Industries (CII) launched the Green Power Market Development Group (GPMDG) in Bangalore, India. The group will help boost the country’s use of renewable energy like wind and solar power.

The public-private partnership brings together industry, government, and NGOs to build critical support for renewable energy markets in India. For starters, the group will connect potential industrial and commercial renewable energy purchasers with suppliers. A dozen major companies belonging to a variety of sectors—like Infosys, ACC, Cognizant, IBM, WIPRO, and others—have already joined the initiative and have committed to explore options for increasing their use of renewable energy.

The group also aims to make India’s clean energy development more mainstream. Green power buyers and generators in India currently face policy and regulatory barriers—such as high transmission costs and extensive approval processes. Through the GPMDG, the private sector will be able to work constructively with government agencies to instigate the types of renewable energy policies that will spur greater clean energy development.

Communicating the "Financeability" of Energy Efficiency Projects (EEPs)

Guide to Data Needs for Financing EEPs in China

This guide will help companies be better prepared as they seek to secure attractive external financing for energy efficiency improvements at their facilities in China. The guide can be used by industry, energy services companies, and financiers to achieve a smoother financing process and prompt...

A Closer Look at the Evolution of Brazil’s Overseas Investments

From 2001 to 2011, Brazil’s per capita GDP more than tripled. At the heart of this domestic economic boom is the Brazilian Development Bank (BNDES).

BNDES is Brazil’s key financial institution for domestic long-term financing, and it’s one of the main financial engines behind Brazil’s take-off as a leading Latin American economy. Its lending and equity investments are becoming increasingly important internationally.

But what’s driving all of this growth? And what standards exist to ensure that Brazil’s overseas investments aren’t coming at the expense of the environment and human well-being? WRI seeks to address these questions and more in its new slide deck, “Emerging Actors in Development Finance: A closer look at Brazil’s Growth, Influence and the Role of BNDES.”

 

Playing Together: Growing Environmental Entrepreneurship through Greater Collaboration

This is the fourth installment of a five-part blog series on scaling environmental entrepreneurship in emerging markets. In this series, experts in the field provide insights on how business accelerators, technical assistance providers, investors, and the philanthropic community can work with developing market entrepreneurs to increase their economic, environmental, and social impacts. Read the rest of the series.

What do development banks, impact investment funds, foundations, and business accelerators have in common? Each of these organizations plays a significant role in supporting entrepreneurs in developing countries, including those who are trying to solve environmental problems through commercial enterprises.

But in most cases, these groups have traditionally occupied distinct niches in the support they provide. Development banks specialize in providing businesses with grants, loans, and technical assistance; impact investors provide debt or equity at market or near-market rates; foundations channel their philanthropy to create change; and business accelerators help entrepreneurs hone their business skills and attract investors.

What would happen if these groups worked more closely together? As we discussed at a recent WRI event, if organizations were able to combine their respective strengths, entrepreneurs could capture greater benefits than if groups work alone.

Unlocking Climate Finance: How Can Multilateral Agencies Better Leverage the Private Sector?

The Doha negotiations that just concluded earlier this month have again drawn attention to the urgent need for climate adaptation and emissions reductions. Government representatives, civil society stakeholders, development aid organizations, and corporates agree that the world must make big strides—soon—if we are to have any hope of keeping global average temperatures to 2 degrees Celsius above pre-industrial levels.

One problem, though, is how to generate enough finance to fund these activities. A new WRI working paper aims to address this challenge by examining the role multilateral agencies can play in mobilizing private sector finance for climate change adaptation and mitigation.

Leveraging the Private Sector to Bridge the Climate Finance Gap

Developing countries—those most vulnerable to climate change’s impacts—will need $300 billion annually by 2020 and $500 billion annually by 2050 for mitigation activities alone. The newly established Green Climate Fund (GCF), meant to channel $100 billion annually into climate-relevant investments starting in 2020, is a significant first step, but does not fill the gap of what’s needed.

The public sector cannot tackle this challenge alone, and indeed, the GCF already envisions funding from a mix of public and private sources. The key, then, is to mobilize the private sector to create new investment opportunities and new markets.

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