Q&A: ‘There’s a Lot More Climate Finance Available than People Think’
IPS Correspondent Yazeed Kamaldien speaks to DR. FRANK RIJSBERMAN, director-general of the Global Green Growth Institute (GGGI) about accessing finance for climate mitigation.
CAPE TOWN, South Africa, Jan 11 2019 (IPS) - While growth in the green economy looks promising, government regulation and a business-as-usual approach are among the hurdles inhibiting cleaner energy production.
Dr. Frank Rijsberman, director-general of the Global Green Growth Institute (GGGI), believes shifts are needed to realise more projects. And he believes funding is available.
“We have teams in more than 30 countries. We work on policy barriers and help develop bankable projects. In the last two years we have helped our member countries mobilise at least one billion dollars in green and climate finance,” Rijsberman told IPS. GGGI is a treaty-based international organisation that assists countries develop a green growth model.
Rijsberman was among panelists discussing ‘Unlocking Finance for Sustainability’ at the Partnership for Action on Green Economy (PAGE) Ministerial Conference being held in Cape Town, South Africa from Jan. 10 to 11. It gathered government leaders, businesses and environmentalists to focus on the challenge to “reduce inequalities, protect the environment and grow the economy”.
The conference focused on the 2030 Agenda for Sustainable Development, adopted three years ago.
“It is time now to take these global goals and turn them into real changes in the lives of people and nations. It’s time for action,” stated the conference agenda.
“We can restructure our economic and financial systems to transform them into drivers of sustainability and social inclusion; the two prerequisites for achieving the Sustainable Development Goals and targets of the Paris Agreement on climate change,” it continued.
At the December United Nations’ Climate Conference in Katowice, Poland, where ministers from around the world negotiated on how best to implement the 2015 Paris Agreement, which outlines commitments to mitigate climate change, accessing finance was a topical issue. IPS reported from the 24th Conference Of The Parties (COP24) that the African team of negotiators had been concerned about who would carry the burden of financing the implementation of the Paris Agreement.
PAGE gathered around 500 innovators and leaders from governments, civil society, private sector, development organisations, media and the general public. The idea was to showcase “the experiences and creativity of first-movers…and engage in an open debate about what it is going to take to for us to have a ‘just transition’ to economics and societies that are more inclusive, stable and sustainable.”
Rijsberman offered his insights gained from working in different countries on accessing financing for green projects.
Excerpts of the interview follow:
Inter Press Service (IPS): Where is this money that you mention for green projects?
Frank Rijsberman (FR): There’s a lot more finance available than people think. There tends to be an over focus on development money but the largest amounts of money is with the private sector and institutional development such as pension funds. We need to get the private sector off the sidelines and to invest in renewable energy.
IPS: And how can that be done?
FR: They need to realise that green investments are attractive. If you want to do socially important projects then renewable energy is it. It has become the cheapest, most attractive form of energy.
IPS: What about the role that governments play in this? They are the regulators that sometimes inhibit the private sector.
FR: Sometimes we sit in the room with the private sector and ask them what stops them from investing and they say it’s regulation and policies. We have to find a more welcoming environment.
We talk to governments and they talk about a study they did three years ago and tell us renewable energy is expensive. But we tell them prices have come down. All that governments know is how to build fossil fuel power plants. Fossil fuel project developers are still in their contact lists. The banks know what to do. They need to look at an energy mix.
IPS: So what is it about government policies that hinder moves to renewable energy?
FR: Some governments have laws that they use to disconnect companies from power if they put solar on their rooftops. Other countries, like Finland, still have old polices that are bad and that are still on the books. It is also difficult politically when the government subsidises fuel and not renewable energy. Governments need to remove policy barriers.
We are in the middle of such a rapid transition but if you sit in a country where governments don’t see that it’s difficult.
Coal and oil is more certain [to produce power] but for countries that need to import that, where prices are uncertain, it’s a lot more certain to use the sun and wind if you have this in your country.
IPS: How is the prospect for renewable energy looking in the developing world?
FR: If you are using only coal-fired power plants then you will sit with a stranded asset. Countries that already have a lot of investment in fossil fuels will find the change to renewable energy painful.
In Africa, most countries don’t have this. In some countries only 20 percent of people have energy access. These countries can invest in green energy and they can avoid making bad investments and can leapfrog into renewables.
They don’t have to look like Asia where they have rapidly developed economies and sit with coal-fired power stations that pollute their cities.
There is a real opportunity to avoid the problems that other countries have.
IPS: What about developing country examples of renewable energy that worked?
FR: Just two years ago when the Indian government wanted to a build a power plant they found the prices of large-scale solar panels less than coal-fired power plants. They scrapped all their plans. They are looking at solar power projects.
But there is still a lot of inertia. People are still continuing to invest in fossil fuels. We are trying to show governments through information and projects that this is feasible. We want to show how it can reduce risk.
We are working on projects. In Fiji the government gives a subsidy to low-income houses for electricity. We have proposed a project where the government puts solar panels on the roof and uses the same subsidy to finance this. It’s about using that money for sustainability.
Low-income houses have TVs and mobile phones. Making a package for people that puts solar on their roof is better. They can charge their mobile phones and [solar] also connects to their fridge and TV. Social movements have done this in some countries.