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5 Achievements from Germany’s “Energiewende”

Germany is in the midst of an unprecedented clean energy revolution. Thanks to the “Energiewende,” a strategy to revamp the national energy system, Germany aims to reduce its overall energy consumption and move to 80 percent renewable energy by 2050. The country has already made considerable progress toward achieving this ambitious goal.

In fact, other countries like the United States can learn a lot from the German clean energy experience. That’s why WRI is hosting a German energy speaking tour in the United States this week, May 13th-17th. Rainer Baake, a leading energy policy expert and key architect behind the Energiewende, and WRI energy experts will travel to select U.S. cities to share lessons, challenges, and insights from the German clean energy transformation. They will be joined by Dr. Wolfgang Rohe and Dr. Lars Grotewold from Stiftung Mercator.

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The U.S. Contribution to Fast-Start Finance

FY12 Update

This fact sheet updates a May 2012 working paper on the U.S. fast-start finance (FSF) contribution over the 2010-2012 period. It analyzes the financial instruments involved in the U.S. self-reported portfolio—about $7.5 billion, or 20 percent of the total FSF commitment globally. It also...

Why Is Climate Finance So Hard to Define?

This is the first installment of our blog series, Climate Finance FAQs. The series explores the often nebulous world of climate finance, providing clarity on some of the key terms and current issues. Read more posts in this series.

Surprising as it may sound, there is no standard definition of climate finance. In fact, there are many differing views on what type of funding constitutes climate finance, how it should be delivered, and how much money developing nations will need to mitigate climate change and adapt to its impacts. This vortex of information can be confusing to navigate. Here, we'll do our best to break down all of the components that define “climate finance.”

Defining Climate Finance: Broadly to Narrowly

In its broadest interpretation, climate finance refers to the flow of funds toward activities that reduce greenhouse gas emissions or help society adapt to climate change’s impacts. It is the totality of flows directed to climate change projects—the same way that “infrastructure finance” refers to the financing of infrastructure, or “consumer finance” refers to providing credit for purchases of big-ticket household items.

The term is most frequently used in the context of international political negotiations on climate change. In this context, climate finance—or international climate finance—is used to describe financial flows from developed to developing countries for climate change mitigation/adaptation activities, like building solar power plants or walls to protect from sea level rise. This interpretation builds off the premise that developed countries have an obligation to help developing countries transform their economies to become less carbon-intensive and more resilient to climate change.

Lord Nicholas Stern Identifies 3 Obstacles to International Climate Action

Six years after the release of the landmark Stern Review on the Economics of Climate Change, Lord Nicholas Stern revealed yesterday the most challenging hurdle ahead for international climate action. Overcoming this obstacle is not a matter of figuring out the scientific or policy pathways needed to curb climate change—nor is it determining what technologies to adopt or what investments must be made. “What’s missing is the political will,” said Stern.

The famed economist elaborated on this problem during an address yesterday hosted by WRI and the International Monetary Fund (IMF), “Fostering Growth and Poverty Reduction in a World of Immense Risk.” Dr. Andrew Steer, WRI’s president, and Christine Lagarde, managing director of the IMF, provided opening remarks, articulating the serious economic and human risks climate change poses. Stern focused on the main hurdle to mitigating these risks—political will.

The problem, according to Stern, reflects a lack of understanding in three main areas: climate change’s real risks, the benefits of an alternative pathway, and the need for collaboration and mutual understanding.

Lessons from Thailand: Mobilizing Investment in Energy Efficiency

Developing countries will need about $531 billion of additional investments in clean energy technologies every year in order to limit global temperature rise to 2° C above pre-industrial levels, thus preventing climate change’s worst impacts. To attract investments on the scale required, developing country governments, with support from developed countries, must undertake “readiness” activities that will encourage public and private sector investors to put their money into climate-friendly projects.

WRI’s six-part blog series, Mobilizing Clean Energy Finance, highlights individual developing countries’ experiences in scaling up investments in clean energy and explores the role climate finance plays in addressing investment barriers. The cases draw on WRI’s recent report, Mobilizing Climate Investment.

The development of Thailand’s energy efficiency sector is an interesting case study. It demonstrates how strong government leadership combined with strategic support from international climate finance can drive the transition toward an energy-efficient economy.

In the early 1990s, Thailand’s economy was growing rapidly at 10 percent per year; the power sector was growing even faster. The government recognized that conserving energy would provide a low-cost way to meet its citizens’ rising demand for energy.

Are Developed Nations Falling Short on Their Climate Finance Commitments?

UPDATE 4/11/13: After this blog post was published, the OECD released updated figures for 2010 and 2011. The data still shows a decrease in commitments for adaptation, mitigation, and climate finance, as this blog post states. However, adaptation expenditures were 3 percent higher in 2011 than in 2010, as opposed to unchanged. (View updated figures.) The changes in the numbers are a result of donors entering new data for previous years or updating their old data. Preliminary data for 2012 shows that aid to developing countries continued to fall. Detailed figures for 2012 will be released in June 2013.

At the 2009 U.N. climate change conference in Copenhagen, developed nations committed to provide a collective $100 billion per year by 2020 to help developing countries mitigate greenhouse gas emissions and adapt to climate change’s impacts. Recently, the Organization for Economic Co-Operation and Development (OECD) released some surprising new data on this pledge. The figures indicate that developed nations’ recent climate finance contributions have fallen rather than risen toward the level of their 2020 commitment.

A Look at the New OECD Data

The OECD is a consortium of 34 wealthy countries. Among other joint initiatives, it provides a platform to monitor and share statistics on aid flows and climate finance contributed by its members. Most OECD members report both their climate finance expenditures and commitments using the “Rio Markers” (see text box), and the OECD secretariat periodically makes these numbers public. OECD members’ climate finance contributions represent a significant portion of the collective $100 billion commitment, so the numbers reported by the OECD give a good indication of developments in the climate finance field.

Surprisingly, new OECD numbers show that while adaptation expenditures in 2011 remained the same as in 2010, expenditures for mitigation activities decreased. Plus, the total commitment for climate finance decreased from $23 billion in 2010 to $17 billion in 2011.

While a “commitment” refers to the total amount of money a country will spend on an adaptation/mitigation project over a multi-year period—which is reported at the beginning of a project—an “expenditure” refers to the amount a country spends in a particular year on adaptation/mitigation activities. In January 2013, the OECD updated its data for 2011. It is difficult, of course, to predict or analyze trends based on only two years of data (the only data that’s currently available on OECD climate finance commitments). But given developed nations’ agreement to scale up climate finance significantly by 2020, this decrease is surprising—and could be concerning.

4 Ways the Green Climate Fund Can Support "Readiness" for Climate Finance

Research shows that developing countries will need about $531 billion of additional investments in clean energy technologies each year in order to limit global temperature rise to 2° C above pre-industrial levels, thus preventing climate change’s worst impacts. While developed countries have pledged to provide $100 billion of climate finance per year, this amount is well below what’s needed to help developing nations mitigate and adapt to climate change.

So how can countries bridge this funding gap? The answer lies in part on how well developing countries implement “readiness” activities, as well how effectively developed nations and international institutions like the Green Climate Fund (GCF) can mobilize finance to support them.

The Need for Readiness

To attract investments on the scale required, developing country governments must provide an attractive investment climate—one that encourages public and private sector investors to put their money into climate-friendly projects like solar and wind energy. On their end, developed countries need to offer financial and technical support for “readiness” activities that create the right conditions for said investments. Readiness includes any activity that makes a country better positioned to attract investments in climate-friendly projects or technologies. A few examples include: developing a policy to promote energy efficiency in industry; passing a law that gives a new or existing institution the mandate to promote renewable energy; conducting an assessment of a country’s wind energy resources; or strengthening a bank’s capacity to lend to small businesses in low-carbon sectors. International institutions such as the GCF can play a big role in supporting readiness activities, thereby helping developing nations attract the investments that will help them transition onto a low-carbon, climate-resilient development path.

China’s New Leadership: Confronting Energy, Climate, and Environmental Challenges

This post originally appeared on ChinaFAQs.org.

Leading China experts and top media representatives participated in a ChinaFAQs briefing this past Friday to discuss how the country will address pressing environmental, climate, and energy challenges at home and globally in the coming years. At the National People’s Congress beginning March 5, 2013, Xi Jinping and Li Keqiang are expected to formally become China’s president and premier, respectively. Other top spots in China’s ministries will also be assigned, with implications for China’s future of low-carbon development and for the United States.

The briefing was one of ChinaFAQs’ events highlighting the reasons for China’s action on low-carbon energy, including: energy security, economic competitiveness through technological innovation, and climate and environmental impacts.

Listen to the recording:

Embracing Ecological Progress in China

This post originally appeared on ChinaDaily.com.

Over the past two decades, the world has witnessed a remarkable period of economic and human development: More than 2 billion people have gained access to improved drinking water; life expectancy has increased by approximately five years; more children are going to school, with 90 percent enrolled in primary education; and per capita income levels have doubled across developing countries.

China has experienced an even more profound transformation during this period. The country has sustained an annual GDP growth of around 10 percent. Five hundred million people have been lifted out of extreme poverty. People's lives have visibly improved and there are more opportunities for them.

Yet, many challenges remain. With the world's expanding population, rapid economic growth, and booming middle class, the pressure on natural resources is mounting. The truth is the world is on an unsustainable path.

China is part of this problem, but it also must be part of the solution. China faces real challenges when it comes to the environment and natural resources. Demand for water is rapidly outpacing supply, with food, energy, and domestic use intensifying for this scarce resource. The need for affordable and clean energy is on the rise. China's rapidly expanding urban population is having a significant impact on transportation, energy, and water infrastructure.

Mobilizing Climate Investment

The Role of International Climate Finance in Creating Readiness for Scaled-Up, Low-Carbon Energy

Limiting global temperature rise to 2°C above pre-industrial levels will require billions of dollars in investments each year to mitigate greenhouse gas emissions and shift to low-emissions development pathways. This report draws on the experiences of six developing countries to examine how...

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