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Ambition For the Future – 100%RE to Accelerate Sustainable Development

Abstract

While the Agenda 2030 set the aim to keep global climate change to 1.5°C, existing policy measures, legal frameworks and initiatives are nowhere near these ambitions. However, research indicates that this target is achievable if we fully decarbonize our economy and society by no later than 2050. This ultimately means a transition to 100% renewable energy (RE) and a complete phase out of fossil fuels.

Therefore, this report highlights how 100% RE is a prerequisite for achieving justice and dignity for present and future generations, including a mechanism to finance this transition. The links between these elements – namely regenerative cities, sustainable agriculture, peace and disarmament and education for sustainable development – and 100% RE underpin the reasoning and strong necessity to transition to 100% RE. The clarification of these interrelationships enables a comprehensive approach to climate action and policy design that disrupts single silo thinking while leaving no one behind.

Financing 100% Renewable Energy for all in Tanzania

Abstract

Tanzania is endowed with abundant, high quality renewable resources which could play a significant role in meeting the country’s energy demand and propel living standards to the level of industrialized countries by 2050. This means however, that an average annual investment of US$9 billion is needed, to reach the 100% RE. In order to provide 100% Renewable Energy which is affordable for all, additional financial means are necessary.  A new model focusing on an agreement between MDBs and Central Banks from the industrialized world outlines how to unlock this necessary investment to implement 100%RE for all by 2050.

Implementing a “climate bailout”: How to convert fossil fuel stranded assets into renewable energy investments

Abstract

To comply with the 1.5°C limit agreed in Paris, a significant fraction of fossil resources cannot be used for energy production. The loss of value of fossil fuels such as oil, gas and coal will cause considerable uncertainty and instability on the financial markets. Also, the unavoidable transformation of energy companies towards renewable energy generation will be even harder when they are weakened by the accelerated depreciation of their fossil fuel assets.

Therefore, a new financial instrument is required to enable energy companies to convert their de facto “stranded” fossil fuel reserves into renewable energy (RE) assets. Since assets already threatened by “stranding” can only be sold in the private financial markets at a minimum residual value, private actors can be excluded as feasible buyers.

Passing on the losses to taxpayers would be neither politically nor financially realistic. The only institutions that have the economic potential to implement a “climate bailout” are Central Banks, just as they have done in the banking crisis since 2008.

Unlocking the trillions to finance the 1.5°C limit

Abstract

In order to meet the +1.5 ° C limit specified in the Paris Agreement, a shift of the global energy supply to 100% renewable energy is necessary at the latest by 2050. Such a process requires annual investments in the order of $1.5 to $2 trillion. Although the costs of renewable energies (RE) have recently declined sharply and further downturns can be expected, current investments are stagnating at approximately $250 billion. Therefore, additional monetary support must be provided, in order to bring the global expansion of RE to the necessary scale.

This report outlines how it can be established through cooperation between the non-industrialized countries, the Multilateral Development Banks (MDBs), the Green Climate Fund (GCF), or other financial institutions, and the Central Banks of the industrialized countries.

The Monetary Cost of the Non-Use of Renewable Energies

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Abstract

It is often claimed that renewables are still too costly and not yet competitive with conventional energy sources. But what costs are incurred when renewable energies are not used? Every day during which potential renewable energy sources are not utilised but exhaustible fossil fuels burnt instead speeds up the depletion of these non-renewable fuels. Using burnt fossil fuels for nonenergy related purposes (e.g. in the petro-chemical industry) in the future is obviously impossible. Thus, their burning – whenever they could have been replaced by renewables – is costly capital destruction. This study concludes that, estimated conservatively, the future usage loss resulting from our current oil, gas and coal consumption is between 3.2 and 3.4 trillion US Dollars per year.

Breaking the climate finance funding deadlock

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Abstract

The centerpiece of the WFC proposal is the innovative use of a financing tool that utilises the ability of the IMF to create new money in the shape of its own reserve currency: Special Drawing Rights (SDRs). Such new funding will not be inflationary if issued only against performance, i.e. to produce new goods and services with (mostly) unused productive capacities and unemployed labour. The use and control of this new money could be coordinated by the Global Environment Facility, UNEP, UNDP or the new Green Climate Fund of the UNFCCC.

Financing climate protection with newly created SDRs

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Abstract

The centrepiece of the WFC proposal is the establishment of a financing tool that uses the ability of the IMF to create new international reserve money in the shape of Special Drawing Rights (SDRs). The intention is to support financing facilities such as the new Green Climate Fund established at the COP 16 in Cancun. The IMF member states can decide on the issuance of new SDRs. These are usually distributed to them proportionate to their quota shares. Pursuant to the agreement on the formation of the new Green Climate Fund, member states should agree in advance to commit all or most of the new SDRs to this Fund. A small portion (e.g. 10% – 20%) could be claimed by the member states for the financing of specific climate protection projects.