Biggest clean tech fund ever will double energy spending to $20B

Source: Lisa Friedman, E&E reporter • Posted: Monday, November 30, 2015

LE BOURGET, France — President Obama and the leaders of China, India, Saudi Arabia and more than a dozen other nations will pledge a $20 billion doubling of clean energy spending while deep-pocket investors put up billions of their own in assistance.

The deal among 19 countries and 28 corporate heavyweights, first reported by E&E, is spearheaded by Microsoft co-founder Bill Gates (Greenwire, Nov. 27).

It will be announced as 140 world leaders and thousands of diplomats, celebrities and activists from around the world convene in this heavily guarded airfield on the outskirts of Paris to launch landmark U.N. climate change negotiations toward a new global accord.

“This will set a tone for the meeting in Paris,” said U.S. Energy Secretary Ernest Moniz.

According to Moniz and White House senior adviser Brian Deese, the countries representing 75 percent of global greenhouse gas emissions and 80 percent of the world’s clean energy research and development base will double their funding over the next five years as part of the agreement known as “Mission Innovation.” The current collective spending on clean energy is about $10 billion, Deese said.

Fully half of that is spent in the United States, which will agree to double its share to about $10 billion by 2021.

Other countries involved are Australia, Brazil, Canada, Chile, Denmark, France, Germany, Indonesia, Japan, South Korea, Mexico, Norway, Sweden, the United Arab Emirates and the United Kingdom.

Meanwhile, corporate leaders including financier George Soros, Facebook founder Mark Zuckerberg and Hewlett-Packard Chief Executive Meg Whitman will pledge a still-unspecified amount to aid countries’ projects as part of a new group known as the Breakthrough Energy Coalition.

Calling it a “unique and historic public-private collaboration,” Deese said the investment will go toward connecting basic research to private capital to bring clean energy technologies to scale.

“This initiative is a very important complement to efforts to mobilize finance already underway,” he said. “It should also send a strong signal to the markets that you have the overwhelming majority of basic [research and development] represented by countries … going all in on clean energy.”

Deese noted that nearly all countries by now have submitted plans for cutting emissions, known as intended nationally determined contributions (INDCs). He said the deal is aimed at bolstering those targets.

“For all of the progress that is made, those INDCs are not sufficient to slow the rising temperatures we know we have to hit,” he said.

A key sticking point in the negotiations during the next two weeks will be finance — specifically, whether developing countries trying to green their economies will get enough of it to make the clean energy transition worth it when coal remains cheaper.

Pascal Canfin of the World Resources Institute, formerly France’s minister of development, said while the spending deal might not move specific parts of the negotiations, it helps the broader “Paris package” for dealing with climate change.

“In order to fight against climate change in the real world, we need an agreement plus a commitment on technology. Having two legs, we can now move forward on the road to decarbonization,” he said.

But securing the money, at least in the United States, won’t be easy, analysts pointed out. Moniz, however, argued clean energy research and development funding is an issue that reaches across the political aisle.

“There’s a lot of support for innovation,” he said. “I’ve spoken with many members on both sides of the aisle, and the innovation agenda is one that attracts broad support.”

Paul Bledsoe, a former White House energy staffer under President Clinton, said the deal is critical to helping lower emissions and reduce energy poverty and is in the U.S. economic interest.

“We have a profound competitive advantage over the rest of the world in creating and commercializing new energy technology,” he said, adding, “This suggests a strong prospect for bipartisan support in Congress for R&D investments as a domestic economic engine that can help meet the trillions of dollars of demand in new energy export markets.”

|