Every year governments spend $543 billion subsidising fossil-fuels to consumers. A new report on Fossil-Fuel Subsidies and Climate Change for the Nordic Council of Ministers from the IISD finds that removing these subsidies to consumers and society could lead to global GHG emissions reductions of between 6-13% by 2050.
With potential domestic savings to some government of between 5-30% of expenditures, and in the context of the low oil price many governments are removing subsidies. This report shows how to include national emissions reduction estimates within country contributions towards the UNFCCC using the Global Subsidies Initiative – Integrated Fiscal (GSI-IF) model.
This report discusses the current situation of the energy efficiency sector in India, delves into some of the causes hindering the development of this market and explains why the lack of commercial bank financing is one of the main barriers for attaining higher energy savings. The discussion then moves to proposing two innovative business models to overcome this funding barrier. The first model is a bespoke financing protocol that would serve as a blueprint for banks to reduce perceived risks, learn how to appraise energy savings as cash flows to back loans, and launch energy efficiency as a new credit line. The second proposal is a business model for energy efficiency deal aggregation as a viable strategy for banks to deleverage their balance sheet while creating a broader investor base for energy efficiency projects.
The cost of existing environment-friendly technologies, such as wind turbines and SO2 scrubbers, needs to be brought down so that they can be deployed on a large scale, while fundamental research needs to advance on the frontiers of technologies such as smart grids or energy storage.
Yet, despite these pressing challenges, European companies in the electricity production sector – the largest greenhouse gas emissions emitter in Europe, with 33% of European emissions in 2012 – spend less than 1% of their turnover on innovation, against 10-15% in IT or pharmaceuticals, suggesting that the incentives to conduct Research, Development and Demonstration (RD&D) of new or enhanced low carbon technologies and their associated systems and processes might not be in place.
The objective of this policy note is to investigate whether the current level of public support to environment-friendly technologies is sufficient to allow European countries to respond to the multiple challenges posed by climate change and other environmental concerns and to discuss the policy interventions that might be needed in order to drive forward clean energy technology investments in Europe.
To meet climate change targets, European Union (EU) countries need to significantly increase investment in carbon capture and storage (CCS) and show greater urgency to develop and deploy the technology. Installing 11 GW of CCS electricity generation in the EU by 2030, as envisaged by the EU Energy Roadmap, could cost between €18 and €35 billion. Current policies, including those envisaged by the 2030 framework for climate and energy and the emerging Energy Union, are unlikely to deliver this investment. Economic models indicate that CCS is crucial to the cost-effectiveness of Europe’s emissions reduction targets. CCS can provide flexible, mid-merit electricity generation, which will be much needed as the share of electricity from variable renewable sources increases. It is also, to date, the only technology that can help reduce emissions from industrial installations.
