Tuesday 17th November 2020, 11:00-12:00
This webinar explored the opportunities and challenges for accelerating the financing of clean energy around the world in the aftermath of COVID-19, with a focus on India and the UK and on how to ‘build back better’. It featured a high-level panel discussion and it also provided an opportunity for audience members to pose questions to panel members.
Kanika Chawla introduced and chaired the discussion. Chawla framed the discussion by outlining how in the aftermath of COVID there is an important window opening for the financing of renewables: there will be a large amount of public spending in the coming years, as countries look to economically recover. She argued that what is different now, compared with the aftermath of the financial crash of 2008, is that there is now an urgent concern with the existential threat posed by climate change. She thus sees the current window of opportunity not simply being one of how we mobilise investment in renewables, but also about whether we can ‘green’ the financial system. She emphasised how the India and the UK both have their comparative advantages: India has been the ‘poster child’ for a market-based energy transition, showing how it can be done at scale with market-based mechanisms, while the UK is the heart and focal point of international financial services.
The discussion covered five key themes. First, the critical importance of the financing of renewables and building back better advancing ‘just’ clean energy transitions around the world. Here, Peter Newell spoke about the need and opportunity for donors to collaborate on how we govern innovation in a way that user perspectives are emphasised, and that inequalities over access can be addressed.
Second, the challenge of regional disparities in where finance has flowed, and the need to address this. Panellists noted that finance has mostly flowed to areas with existing strong industry sectors, strong governance arrangements, and policies to attract foreign direct investment. The Indian context was used as an example, where states like Gujarat, Rajasthan, and Karnataka have seen lots of investment in solar, but Bihar and Jharkhand have not. A focus is needed on drawing investment into such states, and de-risking that investment. There is a role for planning here. Amal-Lee spoke about the CDC Groups Catalyst Fund, which is designed for higher risk investments in such regions, where there will be a large social impact.
Third, the discussion covered the challenge of making sure that investment in green technologies delivers local jobs and training opportunities. Here, Amal-Lee highlighted the CDC Group’s investment in Ayana Group, a grid-scale solar enterprise, which has trained and employed 400 women, thus providing local employment and addressing gender imbalance in the renewables sector. This discussion further emphasised how finance flowing into renewables needs to create jobs in places where good jobs are currently oil, gas, or coal jobs. The availability of green jobs will be critical, before people are likely to accept the closing down of fossil fuel economies and associated jobs.
Fourth, the discussion covered at length the importance of public-private partnerships to deliver renewables. The innovative use of public funds to ‘leverage’ public financing will be critical to ‘building back better’. Crucially, however, this discussion emphasised that public-private partnerships must not see that all risks be taken-on by the public sector.
Finally, the discussion emphasised that ending investment in fossil fuel will ultimately be essential. Currently, public subsidies continue to support the carbon economy, and private financing are still flowing into oil and gas. Peter Newell pointed out that this cannot continue, and that investment in solar and other renewables must replace existing portfolios, rather than be additional. Peter spoke of the need for ‘managed decline’ of fossil fuel economies, and to rebalance power – both in a literal sense and politically – in terms of undoing the power of incumbent industries.
Director of the India-UK Development Partnership Forum, Reader in Human Geography and Vice Principal of Newnham College, University of Cambridge
Professor of International Relations, Centre for Global Political Economy, University of Sussex
Director, Climate Change, Value Creation Strategies, CDC Group
Fellow & Director – Centre for Energy Finance, Centre on Energy Environment and Water