The report claims current energy aid regimes do not reflect the different strategies needed to enable fast economic development, and alleviate comparatively slow climate change.
It calls for restructuring of energy aid into two spheres: pro-poor, universal access strategies, and pro-growth, national supply strategies.
7 March 2012: The Energy Research Centre of the Netherlands (ECN) has published a new report, titled “Energy Aid in Times of Climate Change: Designing Climate Compatible Development Strategies,” which proposes new strategies to improve energy aid programs addressing both development and climate change.
The report argues that the conventional framing of aid strategies to simultaneously address development, mitigation and adaptation do not reflect the reality that fast development and slow climate change seem to be incompatible at present. Instead, the report recommends splitting development strategies into two spheres: pro-poor strategies, which target universal energy access for the poor; and pro-growth strategies, which view energy as an engine of growth aiming at improving national energy supplies. The report proposes that climate compatible development strategies focus on integrating pro-growth energy with mitigation strategies, and pro-poor energy with adaptation strategies.
In subsequent chapters, the report explores what this reframing implies for energy aid and the currently separate institutional mechanisms of traditional Official Development Aid (ODA) and climate change funds. Addressing the challenges of fund mobilization, aid effectiveness and systems innovation, the report concludes that traditional ODA funding should address energy access problems and focus on small-scale, pre-commercial technologies, while new climate change funding should address problems of green growth, energy infrastructure and mitigation, and focus on large-scale, close-to-market technologies. The report also finds that energy aid modalities are evolving towards output-based financing, and that more technological research, human capacity building and business development in developing countries is needed as systems innovation for energy access and adaptation is not easily transferable from developed countries.
ECN is an Associate Member of the Global Network on Energy for Sustainable Development (GNESD), a UNEP facilitated knowledge network on energy, development, and environment issues. [ECN Press Release] [Publication: Energy Aid in Times of Climate Change: Designing Climate Compatible Development Strategies]