With climate control initiatives becoming a necessity and greatly accepted by the countries, the world is feeling the urge to boost its efforts in renewable energy growth. Important initiatives that pave the way for clean energy growth are being highlighted and taken into consideration to maximize results. Innovative financial mechanism is one such element that can transform positive green energy building strategies into reality.
Fossil fuels have ran our industrial engine for decades now. Therefore, it is quite the task to adopt green energy choices, leaving the conventional sources within a compressed time frame. However, due to quickly degrading climate health, it is a necessity now to make our efforts translate into positive results within very short time. The only way to reach such a result is through collaboration. And, the only way to encourage and involve countries, industries, businesses, and common man in the fold is to bring in acceptable financial choices.
The Importance of Financial Mechanism
The measure of investments required to help the renewable energy (especially solar) become the mainstream energy source of the world is massive. Research shows that the Intended Nationally Determined Contribution requirement of 64 developing countries in our world within 2020-2030 is $400 billion/year. To generate, collect and manage such a large sum for required growth, the countries must collaborate in developing financial mechanisms that can be modified with time to manage the growing renewable energy needs.
We have to understand that our climate improvement goals are to keep the temperature of the world below +2C. And it is important to highlight that global energy related CO2 emissions are estimated to increase 1.0% (at an average) from 2012 to 2040. Mainly due to rising fossil fuel based global energy supply (6,100 Mtoe in 1977 to 13,700 Mtoe in 2014), and it is estimated that Asia’s CO2 emission is to reach 2.2 billion metric tons in near future for the same reason. Considering all this, it is imperative that the world develops and follows faster and more effective, innovative financial support to help green energy to phase out fossil fuel.
Investment In RE Is Rewarding
Investing in renewable energy is also financially rewarding to the investors. This greatly incentivizes development of private investment based financial mechanisms. Renewable energy harvesting technology has greatly improved, introducing and improving PV solar energy generation technology. It has become a feasible and extremely effective and reliable energy generation component, ensuring investor’s interest.
Government policies and private business strategies are now shifting towards promising low-carbon assets, rather than still clinging on to fossil fuels, since they are near depletion. Market of green bonds are also on the rise, estimated to reach $1 trillion by 2020, from having nearly ‘0’ sum attached to its name in 5-7 years ago. Sovereign funds, pension funds, insurance and individuals are also showing inclination towards favouring green energy shares now, identifying them as a promising sector. Therefore, it is apparent that it is the right time to bet big on renewable energy (especially solar) and securing great returns.
All these facts highlight the urgency and the merit of countries, Government, institutions, and individuals banding together to build innovative financial mechanisms to support renewable energy growth.
However, the responsibility falls on the developed countries to bring the world together to discuss and figure out simple yet world changing path to facilitate renewable energy growth that can bring sustainability and restore our climate.