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UN Green Climate Fund comes under fire for funding coal

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The UN’s Green Climate Fund has been criticised for allowing its contributions to be used to fund coal-fired power plants, Joshua S Hill takes a look at the debate.

News began to circulate towards the end of March that the United Nation’s Green Climate Fund would allow its contributions to be used to fund coal-fired power plants. Since then, news agencies and environmental organisations the world over have made clear their distaste of such a decision.

Karen Orenstein, a campaigner for international environmental organisation Friends of the Earth, was quoted by The Guardian summing up the majority of peoples’ opinions.

“It’s like a torture convention that doesn’t forbid torture,” she said. “Honestly it should be a no-brainer at this point.”

In their article breaking the news, The Guardian quoted from the Green Climate Fund’s (GCF) website’s vision statement: “The fund will promote the paradigm shift towards low-emission and climate-resilient development pathways by providing support to developing countries to limit or reduce their greenhouse gas emissions.”

However, the full quote from which this sentence is pulled sheds a little more light on the actual mission the GCF have taken upon themselves. The vision adds it will take “into account the needs of those developing countries particularly vulnerable to the adverse effects of climate change.”

It might seem a small differentiation, and to be sure, this author isn’t overly impressed with a global climate fund dedicated to helping developing countries adapt to climate change and clean technology, but as always, the whole story is a lot more intricate than a headline on The Guardian.

The Guardian’s primary example of the horror that is diverting funds towards coal-fired power plants is in Japan. According to evidence reported by the Associated Press, Japan counted $1 billion worth of loans for coal plants in Indonesia as climate financing, and another $630 million in loans for coal-fired plants in Kudgi, India, and Matarbari, Bangladesh. It seems an obvious violation of the spirit of the Green Climate Fund, if not the currently-hazy regulations. However, according to Japan, these financings are perfectly legitimate.

“Japan is of the view that the promotion of high-efficiency coal-fired power plants is one of the realistic, pragmatic and effective approaches to cope with the issue of climate change,” said Takako Ito, a spokeswoman for the Foreign Ministry, who spoke to the Associated Press.

And to offhandedly dismiss the mythical idea of “clean coal” as a legitimate use of global climate funding seems to be a very strong case of throwing the baby out with the bathwater. To be clear, I am a strong proponent of clean technologies taking precedence over any new fossil fuel development, but the reality of our current situation is that a wholesale switch to renewable energy is simply not on the cards.

Speaking at Climate Week in New York back in September of 2014, Roland Busch, a member of the Managing Board at Siemens AG and global CEO of the Siemens Infrastructure & Cities Sector, made it clear that his company would not be divesting itself from fossil fuel technology or investment anytime soon. And unlike some arguments, Busch’s reasoning was integral to understanding the current situation facing the global energy industry, especially as it pertains to developing countries.

You can run Germany on renewable energy on a sunny day when the wind is blowing, but you will still need coal [on other days],” Busch said. “Regardless of how much you push [renewable energy] in the next years you will still have a certain share of energy coming from fossil fuels. We are trying to make that more efficient, more low-carbon, with our technologies.”

“In the next ten to 20 years I can’t imagine running any economies without fossil fuel. Beyond 20 years, it’s very hard to say.”

And this isn’t a unique position: It is obviously quite prevalent throughout the fossil fuel generation industry, but a recent poll of energy sector participants found that many believe it is possible to reach a 70% renewable energy system by 2050. The poll was conducted by DNV GL, which surveyed over 1,600 energy sector participants from 71 countries seeking “views on a scenario in which renewables account for 70% of power sector generation.” Their results showed that 80% of respondents believed such an outcome was possible, but only under certain conditions.

Look also to any number of national renewable energy goals, and almost exclusively they are aiming at percentages of renewable energy generating their national demand, rather than a full 100% raft of renewable energy options.

To be sure, the supposed lack of rules evident within the UN’s Green Climate Fund will need to be addressed soon, especially if the Fund is to have any serious impact on the next decade of energy development.

There are suggestions that stricter regulations may be looked at come 2016, but by then the UN’s Paris Climate Change Conference will have come and gone, and with it any impact the Global Climate Fund could have on the discussions held in Paris. But wildly insinuating that the Green Climate Fund is funding coal plants without prefacing such a statement with the fact that such funding is aimed at developing more efficient and inherently cleaner coal-fired plants in locations that may not have the infrastructure necessary to go all-in on renewables is not only unwise, it’s doing more harm than good.

Photo: John Nyberg via Freeimages

Further reading:

‘Underestimated’ coal emissions rising 4% per year – study

US coal decline a warning for fossil fuel investors, says Carbon Tracker

Environmental regulation to slow demand for coal, says report

France pledges $1bn to Green Climate Fund

UN Green Climate Fund nears $10bn after Spanish pledge

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Responsible Energy Investments Could Solve Retirement Funding Crisis

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Energy Investments
Shutterstock / By Sergey Nivens | https://www.shutterstock.com/g/nivens

Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.

Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?

Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.

Tip #1: Focus & Determination

Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.

Tip #2: Minimize Spending

One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!

Tip #3: Visualize Your Goal

You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.

Investing in Clean Energy

One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.

With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.

The Future of Green Biz

As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.

Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.

In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!

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Energy

What Should We Make of The Clean Growth Strategy?

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Clean Growth Strategy for green energy
Shutterstock Licensed Photo - By sdecoret | https://www.shutterstock.com/g/sdecoret

It was hardly surprising the Clean Growth Strategy (CGS) was much anticipated by industry and environmentalists. After all, its publication was pushed back a couple of times. But with the document now in the public domain, and the Government having run a consultation on its content, what ultimately should we make of what’s perhaps one of the most important publications to come out of the Department for Business, Energy and the Industrial Strategy (BEIS) in the past 12 months?

The starting point, inevitably, is to decide what the document is and isn’t. It is, certainly, a lengthy and considered direction-setter – not just for the Government, but for business and industry, and indeed for consumers. While much of the content was favourably received in terms of highlighting ways to ensure clean growth, critics – not unjustifiably – suggested it was long on pages but short on detailed and finite policy commitments, accompanied by clear timeframes for action.

A Strategy, Instead of a Plan

But should we really be surprised? The answer, in all honesty, is probably not really. BEIS ministers had made no secret of the fact they would be publishing a ‘strategy’ as opposed to a ‘plan,’ and that gave every indication the CGS would set a direction of travel and be largely aspirational. The Government had consulted on its content, and will likely respond to the consultation during the course of 2018. And that’s when we might see more defined policy commitments and timeframes from action.

The second criticism one might level at the CGS is that indicated the use of ‘flexibilities’ to achieve targets set in the carbon budgets – essentially using past results to offset more recent failings to keep pace with emissions targets. Claire Perry has since appeared in front of the BEIS Select Committee and insisted she would be personally disappointed if the UK used flexibilities to fill the shortfall in meeting the fourth and fifth carbon budgets, but this is difficult ground for the Government. The Committee on Climate Change was critical of the proposed use of efficiencies, which would somewhat undermine ministers’ good intentions and commitment to clean growth – particularly set against November’s Budget, in which the Chancellor maintained the current carbon price floor (potentially giving a reprieve to coal) and introduced tax changes favourable to North Sea oil producers.

A 12 Month Green Energy Initiative with Real Teeth

But, there is much to appreciate and commend about the CGS. It fits into a 12-month narrative for BEIS ministers, in which they have clearly shown a commitment to clean growth, improving energy efficiency and cutting carbon emissions. Those 12 months have seen the launch of the Industrial Strategy – firstly in Green Paper form, which led to the launch of the Faraday Challenge, and then a White Paper in which clean growth was considered a ‘grand challenge’ for government. Throughout these publications – and indeed again with the CGS – the Government has shown itself to be an advocate of smart systems and demand response, including the development of battery technology.

Electrical Storage Development at Center of Broader Green Energy Push

While the Faraday Challenge is primarily focused on the development of batteries to support the proliferation of electric vehicles (which will support cuts to carbon emissions), it will also drive down technology costs, supporting the deployment of small and utility-scale storage that will fully harness the capability of renewables. Solar and wind made record contributions to UK electricity generation in 2017, and the development of storage capacity will help both reduce consumer costs and support decarbonisation.

The other thing the CGS showed us it that the Government is happy to be a disrupter in the energy market. The headline from the publication was the plans for legislation to empower Ofgem to cap the costs of Standard Variable Tariffs. This had been an aspiration of ministers for months, and there’s little doubt that driving down costs for consumers will be a trend within BEIS policy throughout 2018.

But the Government also seems happy to support disruption in the renewables market, as evidenced by the commitment (in the CGS) to more than half a billion pounds of investment in Pot 2 of Contracts for Difference (CfDs) – where the focus will be on emerging rather than established technologies.

This inevitably prompted ire from some within the industry, particularly proponents of solar, which is making an increasing contribution to the UK’s energy mix. But, again, we shouldn’t really be surprised. Since the subsidy cuts of 2015, ministers have given no indication or cause to think there will be public money afforded to solar development. Including solar within the CfD auction would have been a seismic shift in policy. And while ministers’ insistence in subsidy-free solar as the way forward has been shown to be based on a single project, we should expect that as costs continue to be driven down and solar makes record contributions to electricity generation, investment will follow – and there will ultimately be more subsidy-free solar farms, albeit perhaps not in 2018.

Meanwhile, by promoting emerging technologies like remote island wind, the Government appears to be favouring diversification and that it has a range of resources available to meet consumer demand. Perhaps more prescient than the decision to exclude established renewables from the CfD auction is the subsequent confirmation in the budget that Pot 2 of CfDs will be the last commitment of public money to renewable energy before 2025.

In short, we should view the CGS as a step in the right direction, albeit one the Government should be elaborating on in its consultation response. Its publication, coupled with the advancement this year of the Industrial Strategy indicates ministers are committed to the clean growth agenda. The question is now how the aspirations set out in the CGS – including the development of demand response capacity for the grid, and improving the energy efficiency of commercial and residential premises – will be realised.

It’s a step in the right direction. But, inevitably, there’s much more work to do.

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