IISD - Clean Energy Investment

If investment in energy infrastructure falls short of the monumental levels needed, we will be facing a crisis of development. If the investment materializes and is channeled into traditional modes, however, we will have a crisis of environment. The efforts needed diverge much further from the baseline case than we have yet succeeded in going. • One of the ways to address this problem is to focus on fostering significant new flows of clean energy investment from the private sector. The public sector funds committed to date, and likely to materialize in future, are at least an order of magnitude too sparse. • At the international level, international investment agreements may contain language that leaves government regulators exposed to binding compensable arbitration over climate change-related measures that impair investor profitability. • At the domestic level, addressing policy and regulatory obstacles to clean energy investment may be one of the most important ways that governments, MDBs and donors can observe their various technology transfer obligations. Trade policy may have a role to play here, similar to the role it plays in the Integrated Framework collaboration that aims to help LDCs better exploit potential gains from trade liberalization.