March 14, 2007—With the global focus currently on climate change, top corporate officials, senior government representatives from the G-8 and Plus 5 nations, as well as the Presidents of the Multilateral Development Banks (MDBs) gathered in London this week at the Financing Clean Energy conference to discuss practical ways to encourage the private sector to invest in a lower carbon economy, including through energy efficiency and renewable energy, in both developed and developing countries.
Co-organized by the EBRD, the World Bank, the World Economic Forum, and the World Business Council for Sustainable Development, and part of the G8-Gleneagles dialogue, the two day conference also provided the more than 200 participants with a key opportunity to engage in the refinement and implementation of the World Bank led Clean Energy Investment Framework (CEIF).
In his keynote address to the conference, World Bank President Paul Wolfowitz emphasized that poor countries are right to argue they should not have to pay the price for fossil fuel dependent growth in the rich countries. “Rich countries need to lead by example. Today, OECD countries are moving forward with plans to renovate and replace virtually their entire power plant infrastructure. The decisions made in capitals across Europe and North America today will affect generations to come – so it is essential that they make the right choices and invest in clean technology and move towards low carbon strategies,” said Wolfowitz. “Rich countries will also need to lead with direct support to developing nations. We need to reduce poverty and reduce emissions.”
Gordon Brown, UK Chancellor of the Exchequer, said, “Today I call on the Presidents of the MDBs to jointly set out a level of ambition for the scale of investment which can be mobilized through their Frameworks. We have a major challenge in front of us. We need to identify the scale of the response which we intend to make, and bring the private sector – not just foreign investment, but domestic capital in developing countries – firmly into the Investment Framework discussions.”
Representing the private sector, Lars G. Josefsson, President and CEO, Vattenfall AB, said the wise handling of this challenge required global cooperation on many fronts, and no region, country, or sector could handle this challenge alone. “Today business leaders in general have an open attitude towards taking action. We need the support of the global community to shape a stable framework, which creates incentives for commercial solutions, technological development and market-based investments,” said Josefsson.
According to Jean Lemierre, President of the EBRD and host of the conference, the debate on climate change is well known, but international organizations now have a role in working more effectively with the private sector around the world in reducing carbon use. He said the main purpose of the conference was to hear from corporate and banking leaders what obstacles are preventing them from financing sustainable energy and how governments and MDBs can help reduce such obstacles.
On day two of the conference, joint public-private working groups with senior staff from private sector companies and the various institutions attending the conference discussed specific issues and opportunities for enhancing private sector financing in five areas: clean energy, energy efficiency, renewable energy, financial instruments, and adaptation.
The business leaders from developed and developing countries, and representatives financial institution and development banks agreed to coordinate approaches in order to remove existing barriers for increased investments in clean energy in developing countries and countries in transition. The CEIF is considered a broad global platform of convergence between public and private investments, which is consistent with the Regional Investment Frameworks developed by MDBs, according to the respective comparative advantages. The private sector is an indispensable partner both at the global and regional levels.
The joint working groups will continue working during the Spring. They are expected to present by June 2007 a package of recommendations to the Gleneagles Ministerial to be held in Berlin in early September 2007, to the Annual Meetings of the World Bank and IMF (October 2007), to the Davos Forum in January 2008, and to the Japanese Presidency of the G8.
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