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Offers six principles of smart energy policy for developing countries

A recent report from the Intergovernmental Panel on Climate Change (IPCC) said that 77 percent of the world’s energy could come from renewable sources by 2050, as long as governments adopt the right policies. A new working paper, Grounding Green Power, outlines the key components of smart renewable energy policy in developing countries, focusing on the electrical power sector. The paper, from the World Resources Institute (WRI) and the German Marshall Fund of the United States (GMF), in cooperation with the Heinrich Böll Foundation, suggests priorities for international donors looking to make the most efficient investments in clean energy.

“Helping to build a wind farm is a good thing, but when donors support policies that bring down the cost of renewables, they lay the groundwork for many more wind farms and exponentially more renewable energy projects,” said Lutz Weischer, lead author of the paper and Research Analyst at WRI. “Smart renewable energy policies can drive private investment and create the right environment necessary for long-term growth.”

Grounding Green Power identifies the key components of smart energy policies and draws conclusions from on-the-ground experiences in 12 developing countries. The recommendations were based on a workshop with representatives from Brazil, India, Indonesia, Kenya, Mexico, Morocco, Mozambique, South Africa, Sri Lanka, the Philippines, Tanzania and Thailand.

Thomas Kleine-Brockhoff, GMF Senior Director for Policy Programs said, “No two countries are the same, but by convening actors from so many developing countries we have been able to discern best practices that apply across countries. This paper should help the international community as it seeks simultaneously to achieve the goals of development cooperation and reduce the risk of climate change.”

The working paper outlines six principles of smart renewable energy policy that are necessary to achieve transformative deployment at scale, based on the 12 international case studies. According to the authors, a smart renewable energy policy should be:

• Comprehensive – strives to create an enabling environment including power sector regulations, investment and financing conditions, suitable electric grid infrastructure, and technical capacity.
• Based on clearly defined objectives – includes technology deployment, energy access and economic development goals, in addition to added power generation.
• Welcoming to private investment – leverages private investment by promoting attractive and predictable market conditions.
• Cost-effective – calls for careful policy decisions that avoid over subsidization of renewables, while removing incentives for fossil fuels.
• Supportive of innovation – improves performance, reliability, safety and cost of renewable technologies, to take innovation beyond the lab.
• Transparent, accountable and participatory – takes into account the principles of good electricity sector governance, including transparency, accountability, and stakeholder participation.

The paper is intended for audiences including bilateral and multilateral development agencies (the World Bank, bilateral financial institutions, and export-credit agencies); existing multilateral climate funds (Global Environmental Facility and Clean Technology Fund); as well as the new Green Climate Fund; and other international organizations like the International Renewable Energy Agency.

The full working paper is available here.

“Grounding Green Power; Bottom-up perspectives on smart renewable energy policy” was co-authored by Lutz Weischer, Davida Wood, Athena Ballesteros, Xing Fu-Bertaux, of the World Resources Institute and published by the German Marshall Fund of the United States in cooperation with the Heinrich Boell Foundation and WRI.

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The World Resources Institute (WRI) is a global environmental think tank that goes beyond research to put ideas into action. We work with governments, companies, and civil society to build solutions to urgent environmental challenges. (www.wri.org)

The German Marshall Fund of the United States (GMF) is a non-partisan American public policy and grantmaking institution dedicated to promoting better understanding and cooperation between North America and Europe on transatlantic and global issues. GMF does this by supporting individuals and institutions working in the transatlantic sphere, by convening leaders and members of the policy and business communities, by contributing research and analysis on transatlantic topics, and by providing exchange opportunities to foster renewed commitment to the transatlantic relationship. In addition, GMF supports a number of initiatives to strengthen democracies. Founded in 1972 through a gift from Germany as a permanent memorial to Marshall Plan assistance, GMF maintains a strong presence on both sides of the Atlantic. In addition to its headquarters in Washington, DC, GMF has six offices in Europe: Berlin, Paris, Brussels, Belgrade, Ankara, and Bucharest. GMF also has smaller representations in Bratislava, Turin, and Stockholm. (www.gmfus.org/)

The Heinrich Böll Foundation is affiliated with the German Green Party. As part of the Green political movement it has developed worldwide as a response to the traditional politics of socialism, liberalism, and conservatism. The main tenets are ecology and sustainability, democracy and human rights, self-determination and justice. HBF places particular emphasis on gender democracy, meaning social emancipation and equal rights for women and men. As a green think tank and an international policy network, the Heinrich Böll Foundation is active in ecology, democracy and human rights worldwide with 30 offices across the globe. (www.boell.de/service/home.html)