Part 5 of the blog series: What does COP21 mean for Engineering and Technology? Read previous parts here.
This is my fifth blog about the COP21 Paris agreement on climate change that was signed last month, and what its impact will be on engineering and technology.
The final outcome that I want to talk about, is the agreement to increase financing of the Green Climate Fund to $100Bn per year by 2020.
The fund was originally set up following COP16 in 2010, but until now all pledges were voluntary and just $10Bn had been promised (mostly from the US, UK, Japan, France and Germany). So increasing it to $100bn per year in the next 4 years is quite a big commitment.
Even $10Bn is quite a lot of money. But there has actually only been one tranche of money given out so far, in November 2015 where just $362.7 million was actually granted to a combination of climate resilience and energy technology projects. This is but a fraction of the $10bn pledged, so it is unclear exactly what these pledges mean and when the money will materialise.
The destination of all this money is to be decided by a board of 24 representative members (most whom are government ministers working in foreign affairs or environmental development, no engineers sadly!) who review applications on an individual basis. The successful applications that received funding in November were a mixture of climate resilience projects (e.g. scaling Up the Use of Modernized Climate Information and Early Warning Systems in Malawi), and energy technology projects e.g. building a solar energy grid in East Africa.
Despite searching in multiple ways on Google, and reading the Green Climate Fund website, I couldn’t find out how to actually apply for a grant. This might be a problem because the committee will certainly be in need of more applications, they only have 4 years to ramp up from the total of $362 million given out (total) since 2010, to $100Bn every year by 2020. Perhaps I will ask Andrea Ledward who is the UK representative on the committee and who is Deputy Director of the Department for International Development (one of her roles is head of climate and environment).
Assuming that the fund does indeed achieve this target, the effects could be huge. Supposing around half of the money ($50bn) finds its way to clean-tech investments (as opposed to climate resilience projects), this is a significant amount compared to the $130bn invested in energy technology in 2014 in the developing world (which was largely from private investors).
Key technological issues for the developing world are access to gas and electricity (1.3 Billion people still live without access to electricity). Also, how can we raise the energy use per person (a rough proxy for standard of living) without going over the budget of carbon dioxide emissions per person that we need to stick to. See Alistair Morfey’s blog on personal carbon allowances.
So, if allocated well, the Green Climate Fund will have a big impact on the size of the clean energy technology market in the developing world. Engineering companies will benefit if they pay attention to where this money is going in the coming years.