Sustainable Investment in Energy Services
Case Study - Ensuring that, as countries develop, they do so with access to clean technologies.
The Challenges
Finding ways to encourage sustainable investment...Investment-driven economic growth plays a vital role in the development strategies of many developing and least developed countries worldwide.
The challenge is to find ways to encourage investment that supports sustainable development, rather than repeating mistakes associated with rapid industrial growth of the past - which can be expensive and politically difficult to correct. Present and future investment decisions should get it right from the outset.
WWF's Trade and Investment Unit is carrying out a tri-country initiative - located in China, Brazil and South Africa - focussing on how different strategic domestic actors can influence the international trade and investment framework by moving it in a sustainable direction.
The project has a long-term perspective where the key question is how these three countries can become a leading exporter of and investor in sustainable goods and services, as well as a key actor in formulating a proactive environmental agenda.
While the project will look at investment from a broad perspective, the focus will be on the energy and transport system in particular, with the key target being carbon reduction. The projects are meant to contribute to the development of a sustainable investment framework in the energy sector.
Taking China as an example, meeting projected rising demands for energy will require new electricity generating capacity equivalent to the total national French production every three to four years.
If this massive demand for capacity is met using traditional methods, such as coal-fired power plants, China's carbon emissions may total 2,000 million tonnes by 2020, equivalent to 10% of current global emissions.
Much of the growing demand for energy infrastructure in the countries chosen - notably in China - will be met by foreign investment. Each of these countries are rapidly changing, and provide windows of opportunity for reform of their domestic investment regulation to support sustainable energy services.
The Chinese government, as an example, already has overarching policies that support sustainable energy development, but the behaviour of governments and international financial institutions shaping Chinese growth does not always reflect these policies.
The goal is to achieve growth whilst also promoting sustainable development, by putting in place modern, efficient and clean technologies at the outset.
The Opportunity
Development of the energy infrastructure in China, Brazil and South Africa presents a unique opportunity for three rapidly growing economies to develop sustainably, whilst at the same time emerging as leaders in shaping international investment frameworks for sustainable development.Achieving this outcome requires a co-coordinated approach between the governments at issue and the international companies and financial institutions fuelling their economic development - providing possible models for the future.
