Mobilising investment in clean energy infrastructure

 

NEWS

8 June 2016 - Conference on optimising global value chains in environmental goods and services, Paris, France

10 May 2016 - Please take the 2016 OECD Survey on Improving the Investment Environment for Renewable Energy. This survey will feed into the project on Improving the Investment Climate to achieve the Clean Energy Transition. The deadline for response is 10 May April 2016.

 

Mobilising investment in low-carbon technologies such as renewable-electricity generation is central to meeting the two degree (2ºC) goal agreed at COP21 in Paris. In the Paris Agreement, parties agreed to transition to “aggregate emission pathways consistent with holding the increase in the global average temperature to well below 2°C above preindustrial levels”.

Yet investment in low-carbon technologies still needs to be scaled up significantly to achieve the transition to a low-carbon economy, especially in the power sector. There is no shortage of globally available capital, and renewable technologies are increasingly cost-competitive against fossil fuels. So why is investment not flowing faster? Part of the answer is that investments in low-carbon technologies face specific investment barriers in the power sector, linked to policy misalignments and market failures, which constrain their development vis-à-vis fossil fuels. Achieving a level playing field for low-carbon investment is thus critical.

 

Project on improving the investment climate to achieve the clean energy transition

Launched in 2016,  this OECD project has two work streams:

1.    Investment reform for low-carbon investment and innovation

2.    Competition and SOEs in the low-carbon transition

The project will focus on ways to help governments improve their policy frameworks for investment in clean energy, especially in renewable electricity generation, and to help them address systemic bias towards fossil-fuel based investment.

This 2015-16 project builds on the horizontal report Aligning Policies for a Low-Carbon Economy, jointly developed by the OECD, the International Energy Agency (IEA), the Nuclear Energy Agency (NEA) and the International Transport Forum (ITF). That report points to a number of misalignments in policy domains, such as investment, innovation, finance, taxation, trade policies and adaptation, as well as in three specific sectors: electricity, urban mobility, and land-use.

 

OECD instruments, guidance and research

Overcoming Barriers to International Investment in Clean Energy, 2015

Policy Framework for Investment, 2015

Policy Guidance for Investment in Clean Energy Infrastructure, 2015

Mapping Channels to Mobilise Institutional Investment in Sustainable Energy, 2015

Aligning Policies for a Low-Carbon Economy, 2015

Mobilising private investment in sustainable transport: The case of land-based passenger transport infrastructure, 2013

Towards a Green Investment Policy Framework: The Case of Low-Carbon, Climate-Resilient Infrastructure, 2012

Transition to a Low-carbon Economy: Public Goals and Corporate Practices, 2010

 

Blogs, speeches, articles

Investing in green energy, OECD Observer, 2015

Breaking down the barriers to clean energy trade and investment, ICTSD, 2015

Angel Gurría speech to G20 Leaders, 2013

 

Links

OECD work on climate change

OECD work on green growth

OECD work with the G20

Investment for green growth

Financing climate change action  


1. Investment reform for low-carbon investment and innovation

This project will produce a report that provides empirical evidence to support some of the key findings from Aligning Policies for a Low-Carbon Economy, especially the need to align broader policy areas with climate goals, beyond setting climate policies. This project will assess how the broader investment environment interacts with climate policies. It aims to help governments enhance the effectiveness of incentives and other climate policies in encouraging investment and innovation in renewables, through addressing misalignments in the broader investment environment with climate goals.

Contacts

Geraldine Ang (geraldine.ang@oecd.org)

Dirk Röttgers (dirk.rottgers@oecd.org)

 

 

2. Competition and state-owned enterprises in the low-carbon transition

This report will examine the role and influence of SOEs in the fossil fuel extraction and electricity sectors. After providing the bigger picture of the extensive influence of SOEs over energy-related greenhouse-gas (GHG) emissions in many countries, research will focus specifically on investment in deployment of renewable electricity technologies. Through qualitative and quantitative techniques, the project will explore how SOEs and other formerly vertically-integrated utilities may affect investment by other actors in new renewable electricity generation capacity. The project will analyse the role, influence and potential advantages of such incumbents in different electricity markets. Where possible, empirical analyses will be conducted to test hypotheses about potential influences on investment, including through overseas investments by SOEs.

This project brings together OECD and IEA work on barriers to clean energy investment with broader OECD work on SOEs and competitive neutrality.

Contacts

Andrew Prag (andrew.prag@oecd.org)

Dirk Röttgers (dirk.rottgers@oecd.org)



 

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