The role of climate finance beyond renewables: demand-side management and carbon capture, usage and storage

Abstract

Mobilising climate finance for climate change mitigation is a crucial part of meeting the 'wellbelow' 2°C goal of the Paris Agreement. Climate finance refers to investments specifically in climate change mitigation and adaptation activities, which involve public finance and the leveraging of private finance. A large proportion of climate finance is Official Development Assistance (ODA) from OECD countries to ODA-eligible countries. The evidence shows that the largest proportion of climate finance for climate change mitigation has been channelled to the development of renewable energy, with a much smaller proportion flowing to other crucial forms of clean energy-related measures, such as demand-side management (DSM) (particularly sustainable cooling) and carbon capture, usage and storage (CCUS). This forms the rationale and aim of this synthesis paper: to review the role of climate finance to develop clean energy beyond renewables. In doing so, the paper draws on practical policy and programme experiences of some donor countries, such as the UK, and Development Finance Institutions (DFIs). This paper argues that a greater amount of climate finance from OECD countries to ODA-eligible fossil fuel-intensive emerging economies and developing countries is required for sustainable cooling and CCUS, particularly in the form of technical assistance and clean energy innovation. Key Policy Insights • Demand-side management (DSM) and carbon capture, usage and storage (CCUS) are underfunded in climate finance compared with the promotion of renewables. • Climate finance for sustainable cooling, in particular, represents just 0.04% of total ODA, despite cooling projected to represent 13% of global emissions by 2030.

Recent advances in carbon dioxide utilization

“…In the future, R&D projects should be concentrated on finding pathways to process intensification of CO2 utilization, taking capture cost and policy support into account. Unfortunately, the development of such R&D projects is challenging due to their complexity and financial barriers [208]. 4 What is the Potential CO2 Market?…”

Multidimensional assessment of European agricultural sector adaptation to climate change

“…Some of the challenges can be overcome by the sector adopting energy efficient farm practices geared towards adapting to climate change (Troost, 2014). Moves towards greater agricultural energy efficiency have been highly driven by the desire for the sector to achieve the EU's clean energy transition objective by 2030 (Warren, 2019). The EU aims to ensure that Europe not only transitions towards green energy but in addition, adapts it.…”

Clean Energy Solutions and Sustainable Development

“…The inefficiency of these fuel sources is a major global concern given its adverse socioeconomic implications (Abbasi and Abbasi 2010;Ahrens 2017). Overcoming such inequities that compromise sustainable development requires two actions: first, global acknowledgment that the forecast growth in use of traditional biomass is unacceptable and second, a pledge to carry out the requisite modifications, introducing objectives and benchmarks to evaluate development (Birol 2007;Warren 2010). Not only is a novel monetary, institutional, and technical approach needed but also enhanced capabilities to significantly scale up access to modern energy services at the grassroots, from national to global scales (Vezzoli et al 2018;Wang et al 2018).…”

“…Clean energy services improve living standards of the poorest in society in several ways. It has been observed that electricity lengthens the day, making it possible for extended hours of daily domestic and commercial activities (Warren 2010). For instance, modern cooking stoves safeguard the health of women and children, as it prevents them being exposed to dangerous indoor smoke (Renwick et al 2018).…”