“First, cutting emissions will require much more money. Roughly speaking, global investment in clean energy needs to triple from today’s $1trn a year, and be concentrated in developing countries, which generate most of today’s emissions. Solar and wind power can be cheaper to build and run than more polluting types, but grids need to be rebuilt to cope with the intermittency of the sun and the wind. Concessionary lending and aid from rich countries are essential and a moral imperative. However, the sums required are far greater than what might plausibly be squeezed out of Western donors or multilateral organisations such as the World Bank.
So the governments of developing countries, especially middle-income ones, will have to work with the rich world to mobilise private investment. On the part of developing countries, that will involve big improvements to the investment climate and an acceptance that they will have to cede some control over energy policy. On the part of donors, it will involve focusing spending on schemes that “crowd in” private capital, such as indemnifying investors against political and regulatory risks, taking equity stakes in private projects and agreeing to absorb the first tranche of losses if things go wrong. They will have to do things they dislike, such as helping the poorest countries shut coal plants. But without give on both sides, the world will bake.”
The world is missing its lofty climate targets. Time for some realism
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