Clean energy investment falling short of international promises

Posted at November 27, 2012 » By : » Categories : News » Comments Off on Clean energy investment falling short of international promises

Developed nations’ investment in clean energy generation and biofuels in emerging economies last year fell well short of the $100 billion promised at previous United Nations’ climate summits in Copenhagen, Cancún and Durban.

According to a white paper from Bloomberg New Energy Finance (BNEF), cross-border investment to developing nations was just $8 billion last year, while investment between emerging economies has risen 87% to $3.8 billion.

“This analysis shows we are far from seeing anything like the promised $100 billion per year flow of climate finance to the developing world,” says chief executive of BNEF, Michael Liebreich.

In fact, of the $280 billion invested in new clean energy funds in 2011, only $44.3 billion was invested across borders.

There was a modest increase of 35% in investment from developed nations flowing into emerging economies, but the most significant boost came from emerging economies investing in each other.

Despite the repeated promises at international climate summits to deploy annual investment to help developing economies, the US in fact remains the single largest recipient of cross-border investment (CBI), with Spain, Germany, the UK, Italy, France and Canada also making it into the top ten.

There are some emerging economies in the ranking, most notably China in the number one spot, followed by Brazil and India.

“While the climate negotiators in Doha are working on the institutional structure of the Green Climate Fund, this analysis shows the real issue is that the private sector is far from comfortable investing in climate-related assets, while developed world governments are under far too much fiscal and political pressure to make up the shortfall,” says Liebreich.

He warns that while private investors are “poised and ready” to deliver more investment, they are concerned about currency and political risks in emerging markets.

“These concerns are hardly insurmountable and can be addressed by the international community with the right mix of policies and financial instruments,” says Liebreich.

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Related stories:
“Emissions gap” between climate change and policies widening, warns UN (22-Nov)
Fossil fuels continue to dominate global energy use, warns IEA (13-Nov)
Market uncertainty leads to clean energy investment slump (10-Oct)
“Brutal” economic climate drives clean energy investment to three-year low (5-Oct)

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