The European Commission has launced the Global Energy Efficiency and Renewable Energy Fund (GEEREF) with initial capital of €80m. The fund hopes to provide clean, affordable energy to the African, Caribbean and Pacific (ACP) region, North Africa, non-EU Eastern Europe, Latin America and Asia.
In the high stakes world of energy finance, €80m may appear a paltry sum. But the fund is designed to attract foreign investment through co-financing and risk sharing agreements. It therefore hopes to mobilise €1bn from private and national sources over the long term.
The Commissioner for Environment Stavros Dimas (whose blog can be found here ) emphasised that “Developing countries must have access to affordable and clean energy supplies… …This fund can foster private investments and become a real source of sustainable development, especially in Africa”.
The EC scheme is one of many designed to encourage clean energy in developing countries, the most successful being the United Nations Division for Sustainable Development.
The idea is great in theory: more energy less pollution. However, developing countries have two fundamental arguments:
1. The developed countries caused the majority of environmental damage, it should thus be their responsibility to fix it.
2. Spending money on clean energy puts developing countries at a competitive disadvantage to developed countries, who built up industry by causing heavy pollution. This is happening today with China and India, who grow with no regard for sustainability.
3. Energy funding should not come with strings attached, such as enforcement of human rights, limits on defence spending or trade agreements.
The first point is a valid one, often it is the countries who had the least contribution to environmental damage who suffer the most: Alaska, island countries like Barbados and the Maldives. They do not have the resources to fight climate change in an effective way, but the developed countries say they should not be forced to pay for others’ energy development.
The second and third can be dealt with most easily by proper negotiations and universal definitions of the type found in the Kyoto Protocols. Without these, countries bicker endlessly about sovereign rights and responsibility and very little gets done. Thus the GEEREF is a strong initiative but without the support of major international bodies it is destined to become a footnote to Kyoto’s successor.
