ECE Energy Series

2412-0022 (online)
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UNECE’s work on sustainable energy is designed to improve access to affordable and clean energy for all and help reduce greenhouse gas emissions and the carbon footprint of the energy sector in the region. It promotes international policy dialogue and cooperation among governments, energy industries and other stakeholders.  The focus  is on energy efficiency, cleaner electricity production from fossil fuels, renewable energy, coal mine methane, natural gas, classification of energy and mineral reserves and resources, and energy security.
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Financing Global Climate Change Mitigation

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18 June 2010
9789210543347 (PDF)

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This publication addresses the massive investments that will be required in addition to the mobilization of substantial new financial resources that will be needed in order to continue the fight on global climate change. The first part (chapters 1 through 4) provides a review of the existing mechanisms that channel funds to energy efficiency and renewable energy (EERE) projects and understand the success factors in designing EERE financing mechanisms. Part two (chapters 5 through 9) provides a review of the technical, economic, and regulatory conditions in each region and a summary of main activities undertaken by national governments and international institutions, with a particular regard to the work of the UN regional Commissions.
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  • Foreword
    Climate change is widely recognized as the most fundamental and defining challenge of our generation. The average temperature of the earth's surface has risen by 0.74°C since the late 1800s and it is projected to increase by up to 4° C by the year 2100 in absence of an internationally agreed comprehensive set of obligations for climate change mitigation and adaptation and mechanism of their implementation. Even if the minimum predicted increase takes place, it will be larger than any century-long trend in the last 10,000 years. Consequences for environment and sustainable development would be immense, with heavy impact on human habitat, economic and social growth and achievement of the UN’s Millenium Development Goals (MDGs) and other internationally agreed development objectives.
  • Acronyms
  • Preface
    This report is one of the first outputs of the Global Energy Efficiency 21 (GEE21) project, launched by the United Nations Economic Commission for Europe (ECE) in December 2008 at COP-14 in Poznan (Poland). The GEE21 project is designed to develop a more systematic exchange of experience on capacity building, policy reforms and investment project finance among countries of the other regions of the world through their UN Regional Commissions in order to promote self-financing energy efficiency improvements that raise economic productivity, diminish fuel poverty and reduce environmental air pollution such as greenhouse gas emissions. The GEE21 project stems from the positive experience in the ECE region of the Energy Efficiency 21 (EE21) programme, in particular of the project Financing Energy Efficiency Investments for Climate Change Mitigation (FEEI), mainly financed by extrabudgetary funds from the Fond Français pour l’Environnement Mondial (FFEM), the UNEP/Global Environmental Facility (GEF/UNEP), the United Nations Foundation (UNF/ UNFIP) and the European Business Congress (EBC). The GEE21 project also relies on additional funding from the government of the Russian Federation.
  • Acknowledgements
    The volume was prepared by Gianluca Sambucini, Andrea Bonzanni and Brinda Wachs (ECE) with inputs from each of the UN Regional Commissions. The regional overviews have been drafted by Andrea Bonzanni (ECE), Kohji Iwakami and Kelly Anne Hayden (ESCAP), Manlio Coviello and Claudio Carpio (ECLAC), Pancrace Niyimbona, Joe Atta-Mensah and Nancy Kgengwenyan (ECA), Anhar Hegazi, Walid Al-Deghaili and Ziad Jaber (ESCWA).
  • Executive summary
    Carbon abatement scenarios assign to energy efficiency (EE) and renewable energy (RE) a predominant role in climate change mitigation. This will require massive investments and the mobilisation of substantial new financial resources. Against this backdrop, it is useful to review existing mechanisms that channel funds to EERE projects and understand the success factors in designing EERE financing mechanisms. This is the purpose of the first part (chapters 1-4) of Financing Global Climate Change Mitigation – Sources of Financing Energy Efficiency and Renewable Energy Investments.
  • Energy efficiency and renewable energies (EERE) for climate change mitigation
    The purpose of this chapter is to give an overview of the energy efficiency (EE) and renewable energy (RE) environment, including the differences between EE and RE, their respective roles in climate mitigation, and projected costs and investment requirements for mitigation.
  • Selected mechanisms and sources of financing
    The purpose of this chapter is to provide a survey of mechanisms and sources of financing for energy efficiency (EE) and renewable energy (RE) investments for climate change mitigation. Given its scope, this survey can only be considered an introduction to the subject.
  • Complementary technical assistance programmes
    The purpose of this chapter is to explain the aims and uses of Technical Assistance (TA), including sources and access to TA programmes and funding sources.
  • Creating effective financing mechanisms
    This chapter discusses the steps and ingredients to design effective mechanisms fitting different local environments, and with a view to creating sustainable markets (see annex I).
  • The ECE region
    The purpose of this and the following chapters is to present an overview of the regional energy and economic conditions, the local business and investment climates, the national and supranational regulatory frameworks and the major activities by the UN Regional Commissions in the field of energy efficiency.
  • The ESCAP region
    The ESCAP region is characterised by vast social, economic, geographic and development disparities. The region consists of 53 member states and 9 associate member states, including emerging powerhouses such as China and India, large landmasses with considerable fossil fuel resources such as the Russian Federation and the Islamic Republic of Iran, many small island developing states and some of the poorest and least developed countries in the world, including Afghanistan, Bangladesh, Cambodia, Timor-Leste, Tuvalu and Samoa.
  • The ECLAC region
    As a result of the policies pursued by the different countries of the region and the local availability of natural resources, primary energy production in Latin America and the Caribbean has been mainly based on petroleum. Its share as an energy source has, however, fallen steadily since the 1970s and it accounted for 43% of total energy production in 2006 (down from 62% in 1970). On the other hand, in the early 1970s, natural gas accounted for 11% of primary energy production and its share has steadily increased since than, accounting for a quarter of total primary energy supply (TPES) in 2006. It is possible, then, that its share of total production will increase in the near future owing to greater availability and the stronger push by the countries of the Southern Common Market (MERCOSUR) to integrate their gas markets. Hydroelectric power peaked at 11.5% of the total in 2000. Since then, its share of total production has declined to stabilize at about 9%. This decline is due to reforms and the pattern of investments in the electricity industry, which has emphasized building fossil-fuel power plants (thermal, for example). Finally, geothermal and nuclear energy production is still minimal in the region (0.2% and 1% of total energy production, respectively).
  • The ECA region
    The ECA Region is comprised of the following 53 countries of different sizes, demographic characteristics, socio-economic development levels. Patterns of energy production and consumption are very diverse on the African continent. Africa is known to be lagging behind other major world’s regions in terms of level of industrialization, modern energy consumption, electrification rates and hence to contribute marginally to global trade and wealth creation, Africa has the lowest electrification rate in the world and it is anticipated that half of the population living in Sub-Saharan Africa (SSA) will still be without access to electricity by 2030 if strong policy measures are not taken to reverse the current situation, as illustrated in figure 8.1 below.
  • The ESCWA region
    The energy sector of the ESCWA region has played and will continue to play an important role globally as well as within the region. It serves as a main source of revenue through oil and (to a lesser extent) gas export and it could potentially satisfy energy needs for economic and social development. However, more than 20% of the population in rural and urban poor areas do not have access to energy services and as many are highly underserviced. Moreover, in many cases, the efficiency of energy production and consumption in the region requires improvement.
  • Conclusion
    This publication shows that models for designing financing instruments and sources of financing are readily available and the potential for EE improvements is vast in every region of the world, allowing the elaboration of win-win solutions for the mitigation of climate change, the fight against poverty and the quest for sustainability and energy security.
  • EERE financing mechanisms - Building blocks
  • Main public finance mechanisms
  • DFIs and climate mitigation financing
    The following is a cursory review of the climate mitigation financing activities of selected Development Finance Institutions (DFIs): ADB, AfDB, AFD, EBRD, EIB, IDB, World Bank Group, as well as the Climate Investment Funds.
  • Legislative & regulatory frameworks by country
  • References
  • Bibliography
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