Talk by Jochen Harnisch, division head of the competence center environment and climate at KFW, at Stanford‘s Precourt Institute for Energy on financing required for global green energy transformation.
KFW is the development bank of Germany and Dr. Harnisch coordinates strategy and product development for climate protection and adaptation to climate change in developing and industrializing countries.
A new paper strategy by the World Bank Group sets a new direction for energy sector investments focusing on expanding energy access and sustainable energy. Along with expanding access to energy, the Energy Sector Directions Paper focuses on accelerating energy efficiency and renewable energy development as per the Sustainable Energy for All initiative’s 2030 goal for doubling global energy efficiency measures and the global renewable energy mix share.
“As part of a drive for universal access, financial solutions or guarantees will be made available for the most feasible energy options for the poor and for people living in fragile and conflict-affected states. If short-term options include those with moderate or high greenhouse gas emissions, complementary support will also be provided in the medium term to harness lower-emission options.”
“In rural, remote or isolated areas, off-grid solutions based on renewable energy combined with energy- efficient technologies could be the most rapid means of providing cost-effective energy services. Engagement in cleaner cooking and heating solutions will grow.”
“The WBG will provide financial support for greenfield coal power generation projects only in rare circumstances. Considerations such as meeting basic energy needs in countries with no feasible alternatives to coal and a lack of financing for coal power would define such rare cases.”
For those interested in the relationship between equity markets and unemployment, here is an interesting chart by The Economist that sums up that ‘synching feeling’.
One thing is clear, producing goods in cheap labor markets and exporting them to high valued economies only end up eroding long-term viability of these advanced economies. Therefore, even if the action is highly profitable and looks good on the balance sheet (to outsource production of some goods to cheap labor markets), this is but a short-term solution with serious long-term economic consequences.
As the payoff from investment in advanced-analytics management and big data revolution becomes real, the art and science of delivery is on the upswing as institutions share knowledge, tools and experience in problem solving. For instance, public policy institutions are full of good ideas on how to solve complex social problems, improve STEM pedagogy and student learning, cure diseases, and produce energy (at scale, efficiently, and sustainably). But what has been missing in this process is the ability to implement simple, pragmatic and scalable solutions to effect positive social change. This seems to be changing, pretty fast, however, as organizations integrate their stovepipes of data across operations and sectors to provide powerful insights.
McKinsey has also developed an anthology of leading delivery models by social thinkers and practitioners in health care, smart energy, financial services, governance, and food security to improve development outcomes.