GENEVA — Proponents of clean energy say a new global fund is needed to drive the creation of technology that can fulfill the 2015 Paris Agreement’s goal of halting a rise in global temperatures.
A global fund or international organization could accelerate innovation enabling the energy sector “to meet the demands placed on it by the Paris climate agreement and play a positive role in the fight against climate change,” the World Economic Forum, or WEF, and Mission Innovation, an alliance of 22 governments and the European Union said in a statement in late May.
Some renewable technologies like solar, photovoltaics and wind power have grown rapidly in the past decade. Yet there could be a much broader range of innovation and coordination, according to a white paper published by WEF, the Geneva-based international organization that hosts the glitzy annual gathering at the Swiss alpine resort Davos each year.
Because investments in energy technology typically require long investment horizons and entail high technological risks, the energy sector has struggled to attract sufficient amounts of funding or to align itself with similar investments, WEF and Mission Innovation said in a joint statement.
“Unleashing the full power of entrepreneurship and innovation across the energy system is at the crux of delivering global climate goals and spurring new opportunities for growth,” said Cheryl Martin, managing director and head of WEF’s global center for innovation and entrepreneurship.
The organization proposes forming “an independent international sustainable energy innovation accelerator fund” to pay for innovative energy technology using public and private capital.
Its proposal, put together with help from auditing and tax advisory giant KPMG, says developing instruments for public-private co-investment by nation or region could pay for “deep-tech energy innovations, reduce risks and improve the effectiveness of available public and private funding.”
Other ideas include mainstreaming energy innovation through “strategic public procurement” and using public-private collaboration to “align global policy and industrial innovation efforts” and create a credible road to scale up high-potential technology in areas now advancing slowly.
“The opportunities that exist around energy innovation are incredibly exciting and demonstrate that the industry as a whole is focused on imminent change,” said Regina Mayor, KPMG’s global sector head of energy and natural resources.
“However, the pace at which innovation occurs requires a deeper sense of collaboration from all of us as energy stewards to drive the agenda forward, including how we go about funding, access to technology, global energy policy and research and development.”
An important discussion on accelerating sustainable energy innovation with @C9Martin, @LeoBeltranR & Hon. Ibrahim Baylan at the #MissionInnovation Ministerial Meeting today. New @wef and @KPMG report shows the rate of change is not fast enough. #wefenergy https://t.co/KR7fgS64i1 pic.twitter.com/QmezzwRt99
— Regina Mayor (@Regina_Mayor) May 22, 2018
European-led push for change
The proposal for a global fund coincided with a May ministerial-level meeting in Malmö, Sweden, co-hosted by Mission Innovation, the European Commission, Nordic Council of Ministers and the governments of Denmark, Finland, Norway and Sweden.
Already, a United Nations-organized Green Climate Fund, or GCF, headquartered in Seoul, South Korea, helps finance efforts globally to deal with climate change. But that fund was created in 2010 to support developing countries — not to pay for change within the energy sector.
The GCF was meant to help countries limit or reduce their greenhouse gas emissions and adapt to climate change. The 194-nation U.N. Framework Convention on Climate Change, or UNFCCC, set it up. Equal amounts of funding are supposed to go to mitigation and adaptation.
In 2014, it began gathering pledges of more than US$10 billion. A year later, it was handed the added role of helping nations achieve their commitments under the Paris Agreement.
Environmentalists and diplomats met in April at Bonn, Germany, for talks on how to carry out the climate agreement, which is based on voluntary national pledges to collectively keep global warming below 2 degrees Celsius by 2100, or to 1.5 degrees Celsius if possible. The deadline for nations to approve a Paris rulebook for how to achieve that will come at a summit in December.
Diplomats want to raise transparency in global monitoring when countries cut back on carbon dioxide, methane and other warming gases from manmade causes, primarily fossil fuel burning.
In his address to the United States Congress in April, French President Emmanuel Macron called on U.S. President Donald Trump’s administration to rejoin the Paris Agreement to curb carbon emissions that was reached under former U.S. President Barack Obama’s administration. Trump announced in June 2017 he would pull the United States out of the agreement.
“Let us work together in order to make our planet great again and create new jobs and new opportunities while safeguarding our earth,” Macron said. “There is no Planet B.”