Governance challenges in financing green and sustainable energy policies

Civil society event at the World Bank spring meetings 2010, 22 April

23 April 2010 | Minutes

Organised by Freidrich-Ebert-Stiftung


  • Michael Clark (Research Assignment to UNCTAD)
  • Zhou Qi (Director, Research Office of Political Science, Chinese Academy of Social Sciences)
  • Martha Delgado Peralta (Secretary of the Environment, Government of Mexico City)
  • Ian Dunlop (Fellow, Centre for Policy Development)
  • Werner Puschra (Director, Freidrich-Ebert-Stiftung, New York Office)

Main points raised

65 per cent of China’s energy supply comes from coal. The crucial technology is carbon capture and storage. If China is able to get feasible and affordable technology – it will be easier for china to deal with this problem. There cannot be a unified policy because developing and developed countries have common but differentiated responsibility.

Before 2009, China didn’t pay much attention to climate change. According to the Kyoto principle, developing countries were not responsible. Premier Wen Jiabao was asked about this in his meetings with world leaders in 2009. Obama also asked to cooperate with China. It took some time for China to realise how important a world issue it is, that it is not just the US wanting to slow China’s economic growth.

China has invested in renewable technology. So much so, that the German solar technology companies have sought protection from their government against the Chinese technologies.

In the case of Mexico City the air pollution has been reduced – a crisis forced the city to find different financial mechanisms and solutions. First the city (with funds from the World Bank and Inter American Bank) analysed the sources of air pollution. The city pursued an aggressive policy to reduce pollution. Access to finance is important to make investments in the most energy efficient options, for instance in public transport systems.

The importance of the local community and like to citizens. Civil society is no real substitute for citizen participation. Mexico City government – looking at how to invest so that citizens will make energy efficient choices too, for instance subsidies/incentives to buy efficient light bulbs. With time and good communications – everyone can be involved.

In Egypt, over half of citizens in Cairo are below the poverty line. What kinds of policies will Egypt take? The trend is to shift to green electrical power system. Wind turbine and wind farms. Solar energy will be one of the options. People need to shift their perceptions to renewable energy sources and to green careers. Exporting the natural resources of solar power is much better than burning fossil fuels.

We tend to think of stronger international collaboration as a restriction of member states. There needs to be an agreement where parties feel that there is transparency. There is an opportunity with climate change because we don’t have to reform and existing institution (such as the IFIs) the vested interests are not there yet.

Choosing between a project like Eskom and the incremental cost of producing the same amount of energy through renewables governments will opt for coal unless the additional cost for renewable is met. The world must find a real mechanism to cope with the real cost.

Why aren’t we financing solar power in South Africa? There is a governance issue which is that there isn’t the money to put solar energy providers on the grid. Its not in the structure of the World Bank to give away the money, the problem is that the Bank will lend to projects the government can pay back.