Columbia Center Report on Renewables Investment To Developing Countries

Two new reports on the factors that encourage and obstruct investment in renewable energy in developing nations were just released by the Columbia Center on Sustainable Investment (CCSI).

In the first report, “Scaling Investment in Renewable Energy Generation to Achieve Sustainable Development Goals 7 (Affordable and Clean Energy) and 13 (Climate Action) and the Paris Agreement: Roadblocks and Drivers,” problems with investment in renewables are discussed along with their drivers and potential solutions are distilled from global experience. It makes it clear where urgent international and national efforts should be directed to solve the obstacles to renewable energy investment and promote zero-carbon energy security and prosperity.

The second study, The Role of Investment Treaties and Investor-State Dispute Settlement in Renewable Energy Investments, supports decades of research showing that the legal safeguards in investment treaties have no appreciable effect on fostering foreign investment flows, including in renewable energy. Investment treaties can also be extremely expensive for both governments and the overarching goal of promoting renewable energy investment.

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The transition to zero-carbon energy is the answer to the energy crisis of 2022 and a key component of the answer to climate catastrophe. Even while private markets will be crucial to this process, the transformation will need to be supported by considerable changes in governmental policy. This investment will consist largely of international transactions.

The main barriers to renewable energy investment are highlighted in CCSI reports, along with practical advice on how developing nations can overcome these obstacles while also decarbonizing their economies and energy systems to meet the Sustainable Development Goals (SDGs) and the goals of the Paris Agreement.

The papers make the following policy proposals to free up funding for renewable energy projects in developing nations:
• International and national financial institutions should create effective and sufficient debt financing strategies to reduce up-front costs and promote public and private funding for renewable energy investment.
• To lower the risk of the off-taker and guarantee grid dependability, developing country governments should construct, support, digitise, and modernise the transmission infrastructure and energy storage systems.
• Developing nation governments should create fiscal policy tools to guide and encourage renewable energy investment, and they should then periodically assess and modify them in light of evolving domestic and international economic conditions.
• Governments of developing countries should instead create solid and stable institutional, legal, and regulatory structures that support a long-term, adaptable, and durable investment climate rather than drafting investment treaties.
• The governments of developing nations should create aspirational national energy roadmaps as the foundation of their institutional, legal, and regulatory frameworks.

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A summary of the report entitled “Scaling Investment in Renewable Energy Generation to Achieve Sustainable Development Goals”  & “The Role of Investment Treaties and Investor-State Dispute Settlement in Renewable Energy Investments” is available as a link to the title.