The CEO of Macquarie Group, Shemara Wikramanayake, said that cheap coal is a major obstacle for the transition to renewable energy in developing countries. She spoke at the Bloomberg New Economy Forum in Singapore on Friday, where she highlighted the need to make clean energy more affordable and accessible for the world’s poorest regions.
Wikramanayake pointed out that many developing countries rely on coal for their energy needs and face political and economic challenges to switch to greener alternatives. She said that governments have to balance their zero-carbon targets with the demands of economic growth and job creation.
She suggested that part of the solution is to lower the cost of renewable energy sources, such as solar and wind, and to provide financing and incentives for their adoption. “We need to make it affordable for people who can’t really get there,” she said.
She also stressed the importance of increasing the flow of green capital from rich countries to emerging markets, which need huge investments to replace their coal plants with cleaner energy. She cited the example of Just Energy Transition Partnerships, or JETPs, which are financing mechanisms designed to support the green transition in some of the biggest developing-world emitters.
Mark Carney, chair and head of transition investing at Brookfield Asset Management, who also spoke at the forum, echoed Wikramanayake’s views. He said that cross-border capital for renewable energy projects needs to scale up from a few hundred million dollars to a trillion dollars by the end of the decade.
Carney also said that the upcoming United Nations Climate Change Conference, which will start later this month in Dubai, will be a crucial opportunity to build a new framework to get money to emerging markets. He said that the conference will be a “moment of truth” for the world to show its commitment to the Paris Agreement and the net-zero emissions goal.
The speakers’ remarks come at a time when the world is facing a surge in fossil fuel prices, triggered by the war in Ukraine and other geopolitical factors. The high costs of oil, gas and coal are hurting the economies of poor energy importing countries and undermining their efforts to fight climate change and poverty.
According to the International Renewable Energy Agency, renewable energy accounted for 28% of the global electricity generation in 2020 and is expected to reach 85% by 2050. However, the agency also warned that the pace of the transition needs to accelerate significantly to meet the climate goals and avoid the worst impacts of global warming.
The Bloomberg New Economy Forum is an annual event that brings together leaders from business, government, academia and civil society to discuss the challenges and opportunities of the post-pandemic world. This year’s theme is “Building a Better Future for Everyone”.
Source: Bloomberg
