Substantial unutilized renewable/alternative energy resources (among them small hydro, geothermal, biomass, wind, and solar) exist in several countries in the Region. The principal issues that need to be addressed are: - Key policymakers do not know about these resources or they consider them marginal; therefore, little attention is paid to the development of renewable energy.
- The benefits of using the renewable energy resources are primarily global, i.e., no net carbon dioxide emissions, but the costs are local.
- Even if expected costs equal cost of hydrocarbons, the technology is often more risky.
- Traditional energy producers are often reluctant to change to renewable resources, in part because fuel supply arrangements are more complex and less tested. | | Carbon finance is a potential source of revenue for clean technology investments that contribute to reducing greenhouse gas emissions (compared with the emissions that would have been generated in the absence of the project proposal). However, the window of opportunity is rapidly closing for carbon transactions. Uncertainty abounds in the market about what will happen at the end of the Kyoto Protocol’s first commitment period (2012), and whether a second commitment period will be negotiated. Therefore most transactions have been targeted to meet compliance needs up to 2012, emphasizing quick action to maximize carbon revenues for project finance, particularly for infrastructure investments because it can take a long time from project preparation to ‘first yield’ of emission reductions. |
- Distorted regulatory frameworks and subsidies that favor non-renewable energy resources and technologies reinforce this conservatism. At this stage, due to distorted energy prices, developing renewable energy often makes economic sense mainly in regions that are not connected to the grid/gas networks.
- Renewable energy is still new enough that financing is difficult to obtain, which is a major constraint to its development. A considerable knowledge gap exists in availability, use, and technologies for renewable energies. | | Questions and Answers on Carbon
Finance (English, MS Word, 58 kb) Questions & Answers on Carbon
Finance (Russian, MS Word, 102 kb) |
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