G20 lagging energy transition task; ‘green bank need of hour’
By Our Special Correspondent
New Delhi, April 10: With the Indian G20 presidency left with just about five more months, a research paper has called for urgency to accelerate the energy transition efforts to achieve the carbon neutral goal. The COP27 had also committed to the climate mitigation effort funding to the developing countries, but not much action has yet taken place.
The 2022 Indonesian presidency came up with a Stocktake report, which called for innovation, development and demonstration of clean energy technologies to increase by three times of the present value by 2030, estimated at $4.6 trillion and similarly increases are needed in the investments in clean power by 2025. For the purpose, developing economies where investments equivalent to $1 trillion was required by the end of 2020.
“As per the latest available data from Climate Funds Update, the multilateral flow of approved energy finance stood at about $3.6 trillion, forming about 60 per cent of the total approved multi-theme multilateral finance to G20 developing countries by 20-22,” said an ICRIER research paper authored by Amrita Goldar, Sajal Jain and Poulomi Bhattacharya.
The Bali Energy Transitions Roadmap had three components — the Bali Compact with principles for accelerating clean energy transitions; three key priorities of actions over the short to medium-term (through 2030); and a Presidency Troika action plan with milestones.
The research paper stressed that R&D stage, also known as the innovation stage, requires support in the form of grants, tax credits, contracts, and has a major reliance on finance from research institutions that collaborate with businesses as a strategy towards knowledge and technology transfer. “As per IPCC (2018), there is an investment requirement of $2.4 trillion in the energy mix, annually from 2016-2035,” added the paper.
It underlined that average biomass development in clean energy technology in G20 countries is 6.2 per cent. “Brazil, India, Indonesia, South Korea, UK, EU and Germany stand above the line. Yet, the low carbon hydrogen is jammed in the demonstration and deployment stage,” said the researchers, who noted that clean energy development for almost all G20 countries, be it developing or developed, stands at restricted levels for green hydrogen produced from biomass for heat and electricity.
They called for a greater emphasis on deploying renewable energy sources and helping clean technologies businesses gain the wherewithal to avoid the valley of death, the series of challenges that high-tech start-ups often face in the early stage of development culminating into failures.
“Developed countries are in a better position than developing countries to raise clean finance, i.e., for clean energy development. Challenges faced by G20 developing economies in raising clean finance include a lack of green taxonomies, a lack of an implementation mechanism for climate risk assessments, and the absence of proper effective initiatives towards a carbon pricing structure,” added the paper, calling for matching the finance requirement with demand, accounting for differences in costs of capital, and establishing green state investment banks.
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