Rich nations like Australia have been warned that if they don’t cough up now to help developing countries achieve their climate change and energy ambitions, it’ll cost a lot more down the track.
Investment in clean energy must grow from $US34 billion ($A34.6 billion) in 2009 to an average $US63.6 billion ($A64.7 billion) between 2010 and 2020, if global aspirations are to be met, an alliance of climate groups claims.
The Global Climate Network, a league of think tanks including Australia’s The Climate Institute, released a report on Tuesday that argues for richer countries to invest now, giving the private sector confidence to invest in clean energy in developing nations.
The Copenhagen Accord, supported by more than 120 countries, sets developed countries a goal of raising a combined $US100 billion ($A101.79 billion) a year by 2020 to address the needs of developing countries.
The United Nations Advisory Group on Finance is expected to report on the effort soon, and the study explains the investment challenge is twofold.
Developing countries need help gaining access to capital, but are seen as riskier places to invest in, and clean energy is perceived by many as a high risk investment with uncertain returns.
The study recommends five mechanisms the network claims could leverage up to $US10 ($A10.18) from the private sector for every $US1 ($A1.02) of public finance.
They include governments offering loan guarantees or policy insurance to private investors, or a pledge fund in which governments and investors pledge set amounts of capital into low-risk clean energy projects.
The network urges governments to collectively set aside a portion of the proposed $US100 billion ($A101.79 billion) UN climate fund to help attract private investment.
Nick Pearce, director of the UK’s Institute for Public Policy Research, said money already pledged could be made to work harder.
“It may seem difficult to argue for more investment by governments at a time of spending cuts, but it will reduce the amount of government money that’s required in future,” he said in a statement.
