Setting prices that reflect these side effects—through taxes, licensing, or cap-and-trade systems—could reduce deaths from fossil fuel-related air pollution by 63 percent, decrease global carbon dioxide emissions by 23 percent, and generate revenues totaling about 2.6 percent of global GDP.
There’s a growing gap between current investment in low-carbon energy and what’s needed to meet world demand while avoiding the worst impacts of climate change. The good news is there’s sufficient capital and investor interest to close much of this gap.
However, policies that encourage market certainty and level the playing field between different energy sources are needed to attract the volume of investment required, according to a special International Energy Agency (IEA) report, the World Energy Investment Outlook, released this month.
India has come out with ambitious renewable energy goals, but the country still faces a daunting financing gap. WRI and the Confederation of Indian Industry (CII) are leading an innovative effort—The Green Power Market Development Group—that could bridge this finance gap and help overcome India’s energy challenges.
In tandem with a new working paper, Letha Tawney describes what draws U.S. commercial and industrial customers to renewable energy, and explores how traditional utilities could build on their strengths to deliver affordable renewable energy to customers.
A social entrepreneur invests the little working capital she has to bring solar electricity to a community that –like 1.2 billion people worldwide– lacks access to electricity. The community used to use dirty, expensive and choking kerosene for light to cook by and for children to learn by. The entrepreneur knows she can recoup her costs, because people are willing to pay for reliable, high-quality, clean energy – and it will be even less than what they used to pay for kerosene. Sounds like a good news story, right?
Three months later, the government utility extends the electrical grid to this same community, despite official plans showing it would take at least another four years. While this could be good news for the community, one unintended consequence is that this undermines the entrepreneur’s investment, wiping out their working capital, and deterring investors from supporting decentralized clean energy projects in other communities that lack access to electricity.