Bill Clinton calls for global fund to reform ‘unequal’ energy finance
Jan 28, 2014 - Lucy Woods -
Former US president Bill Clinton has called for global investment in renewable energy and changes to the “inequality” of current financing mechanisms in the energy sector.
|As an alternative to current finance mechanisms Clinton suggested “a global financing facility” for renewable energy similar to the ‘Global Fund’. Image: World Economic Forum|
At the ThomasLloyd Clean Tech Congress Europe in Frankfurt last week, Clinton highlighted long-term finance options is “what we do with traditional energy and coal fire power plants”, whereas currently investors and providers of solar and wind have to provide “all the money upfront”.
Clinton argued that no one has “explained to people adequately” that there is “inequality in financing opportunities” for renewable energy and energy efficiency projects.
At the forum for European investors on 24 January, titled ‘Meet Asia. Meet renewable energy’s future’, Clinton told investors an “analytical and actual financing framework” enabling capital investment in clean energy and efficiency should be financed over “the life of the benefits”.
Explaining further, Clinton used US nuclear and coal plants as an example of unequal financing in the energy sector: “In the US if you want to build a nuclear power plant you get 30 years to pay for it with guaranteed rates from the consumers, and since no insurance company will insure one, the government basically insures the whole operation – that’s a massive subsidy.”
He argued the financial case for renewable energy is not being made strongly enough, and long term financing mechanisms should be introduced the same as for traditional energy.
Criticising current models Clinton used Germany as an example. “If you want to get [renewables] in a hurry, you have to do what Germany did and give very large subsidies, which costs taxpayers lots of money and eventually they get impatient in tough times,” he said.
As an alternative, Clinton suggested “a global financing facility” for renewable energy similar to the ‘Global Fund’.
The Global Fund was set up in 2002 after being initiated by Kofi Annan, former secretary-general of the United Nations. The Global Fund is an international financing institution dedicated to financing operations combating AIDS, tuberculosis and malaria.
By using long-term finance solutions Clinton said “all our subsidies could be much smaller”.
Specifically on the theme of Europe investing in renewable energy in Asia, Clinton said: “Asia is the logical place for Europe with its technological and financial resources to build partnerships that will save the planet for our children and grandchildren.”
Listing the economic growth predicted for Asia – attractive human capital and governments “capable of making a decision not affected by the old politics of the energy economy”- Clinton said renewable investment in Asia is “a good bet”.
Clinton also encouraged investors at the forum to pursue renewable energy investments and carry on research to gain from “enormous opportunities” from countries with high solar potential and high electricity costs from importing fossil fuels
Throughout his speech Clinton highlighted the importance of inter-nation dependence, inclusion, collaboration and cooperation of nations, in helping develop renewable energy and provide investment for the sector.
The former US president ended by telling investors they are “Right in the heart of what could prove to be not just the most important economic movement, but also a profoundly important political, social and public health movement; we should be moving into the most peaceful prosperous and fascinating time in human history.”
Help for developing countries
Also speaking at the event, senior Philippines senator Loren Legarda called for developed countries to “put their money where there mouth is” and invest in clean technology, energy efficiency and natural disaster prevention, arguing that long-term investment was needed to avoid widespread loss of life due to climate change.
Legarda singled out developed countries as accounting for a “significant part of carbon emissions”.
She highlighted the biggest obstacle for renewable energy’s development as the Green Climate Fund, agreed at Copenhagen in 2009 by the United Nations framework convention on climate change (UNFCCC), which she claimed had yet “to be actually funded”.
While being questioned by German journalist and TV presenter Sabine Christiansen after speaking, Legarda said: “I challenge developed countries, and those that cause the pollution of our planet and of our earth, to put their money where there mouth is, and to allow small island states and vulnerable states to access the Green Climate Fund.”
Legarda criticised Copenhagen 2009 as having “so much talk, so much talk!” and called for climate change action.
The senator said disaster risk reduction is “everybody’s business” and that more visible action from the business community is required. “It is not enough for businesses to offer clean technology solutions. You need to make these technologies available, especially to developing countries, with the long-term survival of these countries in mind”.
Legarda highlighted the outfall from last year’s super-typhoon Haiyan, which led to 6,000 deaths and caused damage estimated at US$12.9 billion. She said: “What do you want to see? Loss of lives? What do you want to see: a focus on reconstruction and rehabilitation and investment in clean energy and a more sustainable future?”
Legarda ended her keynote speech by saying: “My hope is for world leaders to lead their respective nations in cutting down on pollution and greenhouse gas emissions, reducing fossil fuel consumption, promoting the use of renewable energy, and assisting developing nations that are most vulnerable to the effects of environmental degradation and climate change.”