Cc Global Green New Deal

8/3/2019 Cc Global Green New Deal

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Technical Note

A Global Green New Deal forClimate, Energy, and Development

A big push strategy to

Drive down the cost of renewable energy

Ramp up deployment in developing countries

End energy poverty

Contribute to economic recovery and growth

Generate employment in all countries

and

Help avoid dangerous climate change

UnitedNationsDepartmentofEconomicandSocialAffairs

December2009


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Acknowledgements

This strategy has been prepared by Alan AtKisson, consultant to the

UnitedNationsDepartmentofEconomicAffairs,withguidancefromJomoK.

Sundaram,AssistantSecretaryGeneral forEconomic and Social Affairs, and

TariqBanuri, DavidOConnor and Ivan Vera of the Division for Sustainable

Development. It is an elaboration of a strategy first spelt out in the

Departments World Economic and Social Survey 2009: Promoting

Development, Saving the Planet, whose principal authors were Richard

KozulWright and Imran Habib Ahmed, under the direction of Rob Vos,

Director,DivisionforPolicyAnalysisandDevelopment.


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Key Messages

Energyisthekeytoeconomicdevelopment,andrenewableenergyisthe

keytoafuturewithoutdangerousclimatechange.

Butrenewableenergyistooexpensivetoday,especiallyfortheworld's

poor,manyofwhomhavenoaccesstomodernenergyatall.

Althoughthepriceofrenewableenergyisfalling,itwillnotfallfastenough

anywhere,onitsown,tohelptheworldwintheraceagainsttimewith

dangerousclimatechange.

Publicpoliciescanhelpproducethenecessarydeclineintheglobalpriceofrenewableenergyandmakeituniversallyaffordableinonetotwodecades.

Thekeymechanismisarapidincreaseininstalledcapacity.Abigpushin

bothpublicandprivateinvestmenttoscaleuprenewableenergywillleadto

rapidcostreduction,technologyimprovement,andlearningbydoing.

Investmentandcostreductionwillgenerateavirtuouscycleofadditional

investment,economicgrowth,employmentgeneration,energysecurity,

geopoliticalstability,internationalcooperationandemissionreductions.

Thisbigpushcannotbeimplementedbyanycountryalone.Inthefirst

decadeandahalf,itwillrequiregloballyfundedguarantees,orprice

supports(e.g.,throughaglobal"feedintariffs"program),tosubsidize

investment.

Afterthat,thevirtuouscyclewilltakeoverandmakefurtherprice

supportsorinternationaltransfersunnecessary,asrenewableenergy

becomesthedefaultoptionfornewenergyinvestmentworldwide.

Pricesupportswillbecomplementedbyaglobalrenewableenergy

extensionprogram:research,technical,andpolicysupportdesignedto

acceleratetheprocess.

ThisstrategyiscalledtheGlobalGreenNewDeal,andthetimetoadoptitis

now.


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Introduction: Push Down to Lift Up

Theworldcanavoiddangerousclimatechangebypushingdownthe

priceofrenewableenergy,asquicklyaspossible.

Theaimofclimatenegotiationsistoreducegreenhousegasemissionsandenable

adaptationtoclimatechangewithoutendangeringmomentumondevelopment.

Thispaperproposesanapproachthatcanhelpachievealltheseobjectivesina

practicalandtimelymanner:afocusonacceleratedinvestmentinarenewable

energyfuture.

Thereisnowbroadagreementontheneedto dramaticallyreduceglobalemissionsofcarbondioxideinthecomingdecades.Atthesame,thereisalsoagreementontheneedtodramatically increasetheeconomicprospectsoftheworld'spoorestpeople,andinparticulartoprovidethemwithmodernenergyservices.Thesegoalsareoftenseenas

being in conflictwith one another,and continuing toview them as conflicting slowsprogress towards either. Only by considering them together as a single, integratedchallengedoesawaybeyondtheimpassebecomevisible.

Butfirst,wemustchangeourstrategicperspectiveontheproblemofclimatechange.Currently, all eyes are locked on the accumulation of greenhouse gases in theatmosphere, and therefore on emissions reduction, or mitigation, as the strategic

responsetothisproblem.Butwemustrememberthatemissionsreductionisagoal;itisnot a strategy. In fact, the almost exclusive focus on emissions targets offers fewattractivechoicestonegotiators(BirdsallandSubramanian,2009).Itlockstheworldintoaperceived"winlose"oreven"nowin"scenario,asanevershrinkingemissions

piemust bedivided upamong (1) thosewhohave already eatenmore than a lion'sshare, and (2) those whose growing and justifiable hunger exceeds the size of theremainingpiecesonoffer.

As agoal, the need for emissions reduction is unimpeachable. As a strategic focus,however,itisleadingusdownadeadendpath.

Theonlyviablestrategyistocreateabiggerpieandthisrequiresustoshiftourfocus

fromtherapidreductionofgreenhouseemissionstotherapidexpansionofrenewableenergy.

Energyisthekeytoeconomicdevelopmentandsocialwellbeing,andrenewableenergyisthekeytoafuturewithoutdangerousclimatechange.Whileforestconservation,landusechanges,andefficiencymeasuresareessentialcontributorstoanypositiveclimate

scenario,therecanbenofutureclimatestabilitywithoutarapidconversionfromfossilfuelstosun,wind,andwaterbasedenergytechnologies.

Fortunately,thereareencouragingsignsthatsuchatransformationintheenergysectorisalreadyunderway.Theglobalmarketforrenewableenergyhasbeenestimatedat

$1.6trillionasof200708.Annualgrowthrateshavebeenreportedas25%forwindenergy,and80100%forsolarphotovoltaics.Withthesedramaticincreasesincapacity

havecomeequallydramaticdeclinesincost.Forexample,thecostofsolarpanelshas


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fallenfrom$5perwattin2005tojustoveronedollarperwattin2009;andinjustthreeto five years, Japanese planners are expecting to cut the cost of a solar electricitygenerationsysteminhalf(EuropeanCommission,2009).Despitetheserapidadvances,renewableenergyremainsexpensive,especiallyforthe

two billion people whohave noaccess tomodernenergy services. Prices are falling,driven by increasingmarket demand, scale economies, and technologicaldiffusion aswellastechnologyimprovement.Butpriceshavenotfallenfastenoughtomakesuch

technologiesaffordableatlargescaleindevelopingandemergingindustrialeconomies.Theyhavenotfallenfastenoughtooutcompetecoal,oil,andnaturalgasas thedefaultchoicesforenergy.Theyhavenotfallenfastenoughtoofferarealisticalternativetomillionsofwomenhuddledoverwoodfires,ortootherswhocontinuetosufferfromthe

healthandplanetdamagingsootofburningbiomass.Insum,thepriceofrenewableenergyhasnotfallenfastenoughtosavetheworldfrom

experiencingdangerousclimatechange.Norwillitfallrapidlyenough,onitsown,todoso.

Butthisproblemisactuallyanenormousopportunityindisguiseforitisaproblem

theworld can do something about. By working together topush down the price ofrenewable energy, as rapidly as possible, we can lift up the prospects of peopleeverywhere,bothenvironmentallyandeconomically.

Creatingpositivetippingpointsandvirtuouscycles

Recent research by the United Nations and others (see, e.g., United Nations 2009,BirdsallandSubramanian2009,JacobsenandDelucchi2009)hasfocusedonwaysto

drive down the price of renewable energy in the near term, accelerate its spreadglobally, improvetheeconomiesofboththedevelopedanddevelopingworld,andendenergy poverty. This genuine "winwin" strategy carries with it another extremelyimportant benefit: it makes possible the attainment of critical emission reduction

targets,andthusreducestheriskofdangerousclimatechange.The"GlobalGreenNewDeal"(GGND)bringsthedifferentcomponentsofthestrategytogetherintoanintegratedprogram:internationalgoalsetting,limitedtimesubsidies,

targeted investments, coordinated nationaldevelopment policies, and comprehensiveextension systems. Together these can accelerate the global economy's arrival at a"positivetippingpoint"in thespreadofrenewableenergy.Pushingdownthepriceof

renewablesandremovingthebarrierstotheiradoptionwillacceleratetheprocessofindustrialscalingupinthatsectoraprocesswhichisalreadyunderway.Expandedmarketsforrenewableenergy,andfastergrowthratesinproduction,willleadtofastertechnologyimprovement,whichwillfurtherlowercostsandthusprices.Theresultwill

beavirtuouscycleofexpansion,learning,andcostreduction.Withinarelativelyshortperiodoftimebetween10and20years,dependingonhowquicklytheworldrampsuppriceswillhavefallentothepointwheresubsidiesforrenewableenergyareno

longernecessary.(Seebox,"TheGlobalGreenNewDealBytheNumbers.")


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TheGlobalGreenNewDealBytheNumbers

The mechanics of the GGND strategy are straightforward. Step 1: define the globalaffordabilitytarget,assumedheretobe$0.03to0.05perkilowatthour,corresponding

roughlyto$1.00$1.50perWattinvestmentcost.Step2:Collectinformationoncurrent

investmentcosts aswellas currentand expectedfuture (in this case,2025)levelsofinstalled renewable energy capacity, assuming no global renewables investmentprogram.Step3:uselearningcurvestoestimatetheinstalledcapacitycorrespondingtothe global affordability target. Step 4: Estimate the additional investment needed toexpandinstalledcapacitytothelevelestimatedinthepreviousstep.Step5:Estimatethe share of the incremental investment that needs to be supported throughinternationalpriceguarantees.Themainvariationin theresult stems fromdifferentestimatesoftechnologylearningcurves. However, even the conservative estimates of learning curves show that theglobal affordability target can be reached with additional investment of up to $100

billion(in2005dollars)peryearoverfifteenyears.Thiswouldbringdownthecostsoftwoleadingrenewabletechnologies(solarPVandwind)toalevelthatisuniversallyaffordable.SignificantlygreaterinvestmentisnecessaryforSolarPVthanforWind,butevenwindrequiressubsidizedinvestmenttoachievethetargetpricewithinthetargettimescale.

Step

Wind SolarPV

1. GlobalAffordabilityTarget(Investmentcost$/W) 1.00 1.00

2a. Currentinvestmentcosts($/W) 1.50 2.903.40

2b. Currentinstalledcapacity(GW) 120 13

2c. Installedcapacityexpectedin2025underBAU(GW) 570 160

3. InstalledcapacitycorrespondingtoGATcost(GW) 700 1390

4a. AdditionalcapacityneededtoachieveGAT(GW) 130 1230

4b. Additionalinvestmentcost(billion2005USD) $33 $1,476

5. TOTALADDITIONALINVESTMENTCOST $10001500billion

Source:PreliminaryanalysisbyUN/DESA-DSD,usingexpectedinstalledcapacitydataprovidedby

IEA(2009),andlearningcurveestimates(investmentcostsperwattofinstalledcapacity)provided

byIIASA(2009).

Thisistheupperendofsuchestimates.Theactualfigurewouldverylikelybelower.Step5(i.e.,internationaltransfers)isnotestimatedexplicitly,butitcanbeexpectedthatatleasttwothirdsoftheadditionalcapacitywouldbedeployedindevelopingcountries.In higher income countries, the additional costs of renewable energy are generallypassedontoconsumersintheirelectricitybills.


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The strategic objective of the GGND is to make proven renewable technologiesuniversally affordable, so that renewable energy becomes the default choice for theworldasawhole.Makingrenewableenergyaffordabledirectlyaddressestheneedsofdeveloping countries and emerging economies, where the demand for new energyservices is most acute, and where the vast majority of new energy development is

expectedtooccurinthecomingdecades.But pushing down the price of renewable energy also ensures that, as aging

infrastructure comes up for replacement in the industrialized countries, thosereplacementswillalsoresultinashiftfromfossiltorenewablepowersources.Inbothcases,pushingdownthepricehelpspreventthelockinofinvestmentcapitalin fossilfuelbasedtechnologies,whichwouldexposethepoortodecadesofpollution,anddoom

humanitytosuffertheconsequencesofadditionalglobalwarming.The GGND involves the mobilization of largescale public and private financing for

investments,whosereturnsattheglobalscaleinclude:

Employment:Millions of new "green jobs" in a rapidly expanding renewableenergy sector in both developed and developing countries. (Investments in

renewableenergyhavebeenshowntocreatetwotothreetimesasmanyjobsasinvestments in conventional energy development.) (Pollin andGarrettPeltier,2007)

Energy Security: Increased geopolitical stability, improving the conditions fortrade and exchange of all kinds. (As nations become less dependent on theproductionandimportationoffossilfuels,theywillhavelessreasonforconflict

overthesourcesofbothenergyandemissions.)

Reduced Climate Risks: A significant reduction in costs associated with theexpecteddamagesfromacceleratedglobalwarming.(AstheSternReviewandothershavenoted,inactiononglobalwarmingcouldresultincostsashighas20%ofworldoutputinthecomingcentury.)(Stern,2006)

International Cooperation: A clear pathway for multiple actors to channelinternationalfinanceformitigation,aswellasamechanismforphasingoutsuchfinancingwithin one totwodecades. (In recentwork,Sternetal.notethat awellstructured finance scheme will create aligned incentives, encouragegovernmentsandprivatesectoractorstoworktogether,andcreatethevirtuouscycleofinvestmentanddevelopmentthatistheessenceofthisstrategy.)(Stern,2009)

Greenhouse GasMitigation: The contributionof this investment to greenhouse

gas mitigation consists of two components: direct and indirect. The directcomponentistheavoidedemissionsduetothesubstitutionofanewrenewableenergyplantforaconventionalenergyalternative,mostlikelycoal.Inthiscase,thisworksout totheavoidance ofbetween2.5and 3.5 billion tonsofcarbondioxideperyearby2025andeveryyearthereafter.Assuminganinvestmentlifeof40years,thecumulativeemissionreductionwouldbebetween100and140billiontonsofcarbondioxideatanincrementalcostofupto$1,500billion,inotherwords,between$15and$11pertonofcarbondioxide.However,thisisonly a part of the story. Once the cost of the renewable energy becomescompetitiveandaffordable,itwillbecomethedefaultoptionforfuturepowersector investments. This means that. between 2025 and 2050, the initialinvestment of $1,500billion will continue to produce additional offsetting of


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carbondioxide.Ifpowersectorcapacitycontinuestogrowathistoricratesandinaccordancewithrisingdemandfromdevelopingcountries,thiswillresult inthe avoidance of an additional 8 billion tons of emissions per year at noadditionalcost.

From forwardlooking firms in the energy sector, to individual householders in theworld'spoorestcountries,toskilledworkersandexpertsinallcountries,aGlobalGreenNewDealcreatesmanywinnersintheglobaleconomy.ImplementingtheGGNDwilllay

thefoundationforanew,selfsustainingcycleof greengrowthglobally,whilesteeringthe world on a course toend the scourge of energy poverty and avoid the threat ofdangerousclimateinstability(Figure1).

Figure1.AschematicofhowtheGlobalGreenNewDealwillworktoaccomplishitsobjectives


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TheElementsofaGlobalGreenNewDeal

TheGGNDinvolvestherapiddeploymentofnineintegratedmechanismsthatwillworktogetherasarenewableenergyaccelerator:

TheGGNDRoadMap1 SetTargets:Setcleartargetsforbothrenewableenergycosts (i.e.,thecostneedstobecomeaffordableaswellascompetitivewithconventionaltechnologies,currentlybetween$0.03and$0.05/kWh),andfor theyearbywhichthetarget cost is to bereached(e.g.,aglobaltargetyearof2025).Givenknownratesofcostreduction,thiswillimplyacorollarytargetforrenewableenergyinstalledcapacity.

2. SetPriceGuarantees:Determinea scheduleofguaranteedprices("tariffs")tobeofferedtosuppliersofrenewableenergy,basedonestimatesofcurrentandfuture

costs. The tariffs offered to new entrants in the market would decline by apredetermined amount every year, converging on the target price by the targetyear. This tariff schedule would provide a strong incentive for accelerated

investmentanddevelopmentofinstalledcapacityinthenearterm.3. Determine Host Country Contributions: Create a formula for estimating the

shareof the feedintariffto bepaidbythehost country.This formulawouldberelated toper capita income ineach country, the cost of specific renewable andconventionalalternatives,domesticinvestmentcapacity,andotherrelevantfactors.

4. Establisha Global InvestmentFundforRenewables:Aglobalinvestmentfund

for renewable energy is essential for underwriting the gap between the feedintariffsthatneedtobeofferedtosupplierstomakerenewablescompetitive,andtheshareofthesubsidythatcanbecontributedbyhostcountries.Theinvestmentfundwillguaranteeforafixedperiodoftime asubsidizedpriceforthedeliveryofnew

renewableenergyindevelopingcountries.

5. ProvideAdditional Support totheLeastDevelopedCountries: Supportcouldincludelowinterestloans,e.g.,forgridexpansion,financialassistanceforcapacitybuildingandinstitutionaldevelopment,technicalassistance,orsubsidizedaccesstotechnologicalinformation.

6. Create Mechanisms to Serve Off-Grid Communities: Offer special provisions

withintheglobalfinancingschemetosupportrenewableenergydevelopmentforoffgridcommunities,e.g.,supplementarysubsidiesorassistanceforbuildinglocalgrids.

7. Create aNetwork of Innovation Centers: Buildingon the analogyoftheGreenRevolution,establishanetworkofresearchandextensioncentersthatwilladapttechnical knowledge to local conditions, and make that knowledge available topolicymakers,investors,andcommunities.

8. Create a Global Climate Conservation Corps: Learning from the lessons ofseveral successful largescale initiatives including thePeace Corps, theCivilian

ConservationCorps,andMdecinsSansFrontiresestablishandrecruita globalbody of skilled practitionerswho can support national institutions and serve astheirlinktointernationalexpertsandknowledgebases.

9. Developthe AppropriateInstitutionalArchitecture:Carefulattentionmustbepaidtocreatingappropriateinstitutionalvehiclesbothnewandinrelationshiptoexisting bodies to channel the resources from the global feedin fund, through

nationalenergyadministrations,torenewableenergysuppliers.


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Agreement and action onthese elementsas rapidlyaspossible,ata global scale,willspeed renewable energy toward its own "global tipping point" a point of selfsustainingtakeoffpoweredbyacceleratedlearningandexpandingmarkets.

While the GGND is a new, comprehensive strategic approach, it brings together theconvergingconclusionsofseveralrecentglobalanalyses,allofwhichpointtoacentralroleforincreasedpublicinvestmentinrenewableenergy,particularlyinthedeveloping

world (e.g., Stern, 2009; Birdsall and Subramanian, 2009; UNEPSEFI, 2009). Thestrategyalsobuildsonwhat isalreadyhappening:successfulmodelsforeachofthesemechanismsexist,inboththedevelopinganddevelopedworld.Anumberofdevelopingcountries(notablyChina, India, andBrazil) havealready established keyelementsof

suchpolicy, finance,andtechnical supportmechanisms.However,thescaleexpansionneededtobringaboutthenecessarycostreductionislargerthanwhatcanbeachievedby these countries acting alone. The GGND will supplement national actions with

internationalsupport,andsimplyenabledevelopingcountriestodomoreandmorequickly.

The GGND also encourages an even faster diffusion of working models in the

industrializedworld,wherecountrieslikeDenmark,Germany,andSpainhaveledtheway on developing the necessary technologies, policies and programs. These earlyinvestments in renewable energy are already being rewarded with both nearterm

financialreturnsandlongertermcompetitiveness;theGlobalGreenNewDealwillworkto amplify these effects, reward innovative enterprises, expand employmentopportunities in technologically advanced countries, and spread the benefits morerapidlytoothercountries.

TheGGNDensures longrunpredictability andmarket stability for renewableenergy

producersaswellasequipmentsuppliers,andthuscreatesthebasisforeffectivepublicprivatepartnership,mobilizationoflargescaleprivatesectorresourcesforinvestmentandinnovation,capacityexpansion,andcostreduction.The GGND also ensures that international resources are linked to tangible outputs

(deliveryoffinalrenewableenergyservices)ratherthaninputs.Finally,adopting the GGNDwill bringmany benefitsof the kind that economists call"intangibles,"butthatarewidelyrecognizedasbothrealandnecessaryforsuccessinanyventureofmagnitude.Theseinclude:

afeelingofhopeandoptimism specifically,thatlargescaleproblemslikeglobal

warmingandenergypovertycanbesolved;

an encouragement to entrepreneurship there are genuine businessopportunitiestopursue;and

a sense of common strategic focus on the goal of reducing the price ofrenewableenergy,andacceleratingaglobaltransitiontoacleanenergyfuture.

TheGGNDrepresentsaglobalopportunityforcooperation,foronlybypushingtogether,and pushing hard, canwe lower the price of renewable energy enough to lift manymillionsoutofenergypovertyandprovideclean,affordableenergytotheworld.


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The Case for a Global Green New Deal: Changing theGame on Climate, Development, and EnergyThe GGND represents a new approach toaddressing, simultaneously, the problem ofglobalwarmingandtheimperativeofbringingenergyandeconomicdevelopmenttotheworld'spoorestpeoples.Butwhiletheoverallconceptisnew,theelementsoftheGGNDare based on existing models and supported by extensive current research. Thefollowing sections summarize the case for the GGND, explain the underlyingassumptions,anddescribehowthestrategywouldworkinmoredetail.

A.Climate,development,andenergyareinterconnectedissues.TherationalefortheGGNDbeginswithafundamentalinsight:climatechangeisnota

problemthatissomehowsetapartfromotherproblems. Inparticular,itis intimatelyconnectedtoboththetypeofdevelopmentandtheenergypathchosentopowerthat

development.BehindtheGGNDisthefollowingpostulate:Amassivedeploymentofnonrenewable,fossilbasedenergytechnologiesinthedevelopedworldiswhatenabledthosecountriestoattainunprecedentedlevelsofprosperitywithinashortspanoftime;butitalsoledto

the current climate dilemma. A rapid and equally massive deployment of clean,renewableenergytechnologiesinthecountriesofthedevelopingworldcanenablethemtoattainsimilarlevelsofprosperityand,whenjoinedtoalargescaleenergyswitchin

developedcountries,canleadtheworldoutofthatdilemma.The energy needs of the world's poor have long been overlooked in the global

discussion on climate change, in terms of both current needs and future planning.(Figure 2) And yet, the poor also represent the world's largest undeveloped energymarket.Today,about1.6billionpeoplelackaccesstoelectricity;

and 2.4 billion still cook withfirewood.By2050,therewillbe3billionadditionalpeoplelivingon planet Earth, and the vast

majority of them will berelatively poor urban dwellersin developing countries. If the

energy systems developed to

providelight,heat,mobility,andother services to all of thesepeoplearebasedonfossilfuels,

there will be no possibility ofattaining the emissionreductions necessary tomaintainclimatestability.Providingenergytotheworld'spoorshouldnotmerelybeseenasa"longtermvision";itisanurgentglobalimperative.Energyservicesarekeyinputstodevelopmentgenerally,andtohumandevelopmentin

particular. Improvements in health, education, and standards of living are closelycorrelated with access to energy. Inadequate and unreliable energy services are

Figure2.Distributionofcountriesshowingthecorrelation

betweenTotalPrimaryEnergySupply(TPES)andscoreonthe

HumanDevelopmentIndex(HDI).Source:UnitedNations,

basedonUNDPandIEAdata.


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centrally implicated in the inability to provide clean drinking water or sanitationfacilities.Ontheotherhand,mostlowcostenergysourcesavailabletodaytomeettheneedsofthepoorareneithercleannorrenewable.Theycontributetogreenhousegasemissions

and often carry with them significant health risks, such as respiratory illness fromexposuretosootparticles.

Whenthelowcostenergyneedsofthepoorareseenasbeinginoppositiontoemissionreduction goals, agreement on a way forward becomes exceedingly difficult. But bylooking atclimate change and developmentasunitedbyacommonissueenergyratherthandividedbyit,truewinwinsolutionsbecomepossible.

TheGGNDofferssuchawinwinsolutionintheformofastrategythatmeetstheneedsofdevelopingnations forenergydevelopment,whileacceleratingprogresstowardthe

goal of a lowemissions economy for theworld as awhole. It functions as a bridgebetweenperspectivesandpriorities,providingeveryoneattheclimatenegotiatingtable

withacommongoal:theprovisionofclean,affordable,renewableenergytoall.

B. The world has a common interest in reducing the price of

renewableenergy,worldwide,asrapidlyaspossible.Thenext1020yearsareacriticalwindowfortheimplementationoftheGGND,because

somuchnewenergydevelopmentwillbeplannedandimplementedduringthisperiod.Ifrenewableenergyistocontributeasignificantportionofnewenergydevelopment,especiallyinthedevelopingworld,reducingitspriceisessential.

AsofAugust2005,about1.4billionpeopleinthedevelopingworldwerelivingonlessthan$1.25perday(theWorldBankspovertyline).However,evenpeoplelivingontendollarsperdaycannotaffordtobuyadequateamountsofrenewableelectricityatthe

current price per kilowatthour, which ranges from about 36 cents from solarphotovoltaicpanelstoaslowas10centsfromawindturbine.Forlowincomepeoplearoundtheworld,energythatcostsmorethan35centsperkilowatthourissimplynotaffordable;andsointheabsenceofsubsidiesrenewableenergywillnotbetheirchoice.

From a developing country perspective, a strategy of simply increasing the price ofconventionalenergytomakerenewableenergymorecompetitivemakesnosense.Norcanthegovernmentsofdevelopingandemergingmarketcountriesaffordto subsidize

renewable energy on a large scale, given current costs and per capita incomes.Meanwhile, in the developedworld, the strategyof simply waiting for themarket toproduce competitive renewable energy, andgreenhousegasemissionreductions, has

also been "failing to deliver" (The Economist, 15 October 2009, citing Committee onClimateChange,2009).Tomakeprogressatapacethatcanwintheraceagainsttimewithglobalwarming,weneed a global strategy for reducing the price of renewable energy, everywhere. Thisrequires accelerating the process by which the price of these new technologies isalreadyfalling:thatis,byscalingup.For example, in Europe today, every time the amount of wind generation capacitydoubles,thepriceof electricityproduced bywindturbines fallsby 9 to17% (Krohn,EuropeanWindEnergyAssociation,2009).Witheachnewwindturbine,theindustry


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learnshowtomakethesemachinesmoreefficientlyandmoreeffectively,thusdrivingdown the costsper kilowatthour. Economists call this effect a "learning curve": themorerenewableenergygeneratingcapacitygetsinstalled,themorewelearnabouthowtoproducerenewableenergy,andthelessexpensiveitbecomes.

Such steep and beneficial learning curves are associated with several socalledemerging technologies, includingwind energy, solar photovoltaic and concentratedsolarenergy(Figure3).Incontrast,maturetechnologies,suchasHydroPPL(Figure

3), have stable cost curves with relatively small opportunities for further costreductions.Currentevidencesuggestsaverylargepotentialforcostreductionsinwindand solar energy. There is even evidence to suggest that their learning curves arechanging in favorableways, creatingtheprospectthat a virtuouscycle of investment

scaleupandcostreductionwillhappenevenfasterthancurrentanalysesmightpredict.Forexample,aconsortiumofsolarcellcompaniesinChinahastwicerevisedestimatesonthespeedofcostreductionjustsince2007.Theyhavemoveduptheplannedtarget

yeartoachieveagovernmenttargetprice($0.146perkWh)from2020to2012,becauseofunexpectedlyfasttechnologicaladvancesandlowerpolysiliconprices(Saber,2009).

Relatedly,studieson thecostsof compliancewithgovernmentenvironmentalpolicies

and regulations support the conclusion that ex ante costs are often overestimatedbecauseof a failure to take into account scale economiesand technological advances(EC2005).

Although learning rates haveoccasionally been described interms of the cost decline per

year,theirprimarydriveristhe

installed capacity. (Figure 3)

Thatis,pricesfallwithgrowinginstalled capacity because ofsuchfactorsasalargermarket,greater market stability andpredictability, standardization

of equipment and componentproduction, competitionamongst suppliers, improveddesigns,andlearningbydoing.In sum, one can accelerateprogressdownalearningcurve

by speeding up the increase ininstalled capacity. The GGNDproposes to do just that, byreducing the primary barrier standing between developing countries and currentrenewableenergytechnologies:theirrelativelyhighprice.Usingpublicinvestmentsand subsidies to reduce the price to rough parity with fossil fuels, combinedwith astablepolicyenvironment and technical support,will remove themajor constraint toacceleratinginstalledcapacity.Itwillalsounlockwavesofdemandanddrivetherapiddeploymentof thesetechnologies. Asthetechnologiesspread,industriesscaleup,andcapacitydoublingtimesdecrease,thenpriceswillfall,followingthewellknownpatternofthelearningcurve.HavingdescribedthedriveroftheGGNDthetechnologylearningcurvewenowturntotheaccelerator:pricesupports.

Figure3.Thegreatertheinstalledcapacityofanenergy

technology,thelowerpriceforeverynewunitinstalled.

(Source:Nakicenovic,IIASA,2009)


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C. A globally coordinated program of price support guarantees for

renewable energy will unleash a transformation in the global

energysector.Countrieshaveusedavarietyofmechanismstopromoterenewableenergy,including

directpublic investment,investmentincentives(e.g.,low interest rates, taxwriteoffs,accelerated depreciation), portfolio obligations, and feedintariffs. While all policymechanismshavehadtheirshareofsuccess,themostdramaticexpansioninrenewable

energycapacitywaswitnessedunderthefeedintariffprogramsenactedinGermanyandSpain."Feedintariffs"obligateelectricitygridstopurchaserenewableenergyasitbecomesavailable(to"feeditin"),andtheyoffertopotentialprovidersofrenewableenergyaguaranteedprice(the"tariff,"orratepaidfortheelectricity).Thetariffsare

generally fixedfora givenperiod, between10and20years,at levels thatensuretheprofitabilityoftheinvestment.Theexistenceofaguaranteethatsuccessfuldevelopment

ofa solaror wind energy installationwill berewardedwith a customeras well asasubsidized price essentially levels the playing field, removing the cost barrier torenewableenergydevelopmentincomparisontofossilfuelbasedtechnologies.Theeffectiveness of the feedin

tariff policy is by now wellestablished.Astudycomparingthe effect of these policies to

other policy mechanismsdesigned to support thespreadofwindenergy found that theyresulted in 7-8 times as much

installed wind capacity.(European Commission, asreported by Thomas B.

Johansson, Chair,GlobalEnergyAssessment) (Figure 4) Theoverall success of the German,Spanish, Danish and other

nationallevel feedin programshasinspiredsimilarinitiativesinChinaand,morerecently,SouthAfricaandIndia,aswellasbyregionalandstategovernmentsintheUK,US,andAustralia.Todaywellover50countriesnowhavefeedintarifflawson thebooks,andsmallerscaleexperiments

arenowaglobalphenomenon.Ofthedifferentoptionstosupportrenewableenergy,thefeedintariffisincreasingly

seenasthepolicyofchoicethatprovidesthemostbenefitatleastcost(DBClimateChangeAdvisors,2009).Itcanbeappliedconsistentlyandtransparently,whilebeingreadilyadaptedtodifferentspecificconditionsindifferentcountries.Wherefeedintariffshavebeenemployedindevelopingcountries,theyoftenhavetobeaccompaniedbygovernmentbudgetaryallocationstocoverthedifferentialbetweentheguaranteed price that the utility pays to the renewable energy suppliers, and theaverageratethatitisallowedtochargeconsumersforeachkilowatthourofelectricity.Thisdependenceonnationalbudgetstocoverthedifferenceplacesacaponthetotalexpansionof renewable energy thatcan take place ina developing country,and thuscreates a disincentive for expanded renewable energy investment. International

Figure4.Countriesusingfeed-intariffscomparedtocountries

usingotherformsofpolicysupportforwindenergy.

(Source:EuropeanCommission,2008,citedbyJohansson,

2009)

Figure4.Countriesusingfeed-intariffscomparedtocountries

usingotherformsofpolicysupportforwindenergy.

(Source:EuropeanCommission,2008,citedbyJohansson,

2009)


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financingtosupportthetariff,orpriceguarantee,willremovethisconstraintandcreatehighly favorable conditions for accelerating renewable energy investment anddevelopment.Asthephraseitselfindicates,feedintariffpolicieshavebeenemployedexclusivelyin

regard to grid connections. Given the current level of grid development in mostdeveloping countries, the policy frameworkwouldneed tobe amended tobeable toincludeoffgridareasaswell.

In practical terms, the GGND involves linking the demonstrated favorability andeffectiveness of feedintariff policies with the rapidly growing energy needs ofdeveloping countries, offering suitablemechanisms for finance, policy, and technical

supportforrapidscaleup. Itdeliverstherightmixofpolicyandmarketstabilitythat,accordingtorecentresearchsummarizedbySternetal.,cancreatethehighestpossibleleverage for public financing, mobilizing up to 15 times the original investment in

additional,followonfunding(Stern,2009,andUNEPSEFI,2009).

The GGND Road Map (page 6) brings together elements of successful programs,including feedintariffs aswell asothercomplementary actions, in such awayas to

accelerate the process ofpolicy design and technology diffusion and adoption that isalreadyoccurring,removemajorbarriersandobstacles,andadapttheprogrambothtointernationalrequirementsandlocalconditions.

As mentioned in the GGND Road Map (Paragraph 4), a new global investment fundneeds to be established to contribute the global share of the subsidy for renewableenergy servicesand supplement the national guarantees offered byeach country.As

such, the Fund will reduce uncertainty and ensure predictability in the renewableenergyindustry.Onceitisinplaceandadequatelyresourced,itwouldhelpstimulatea

rapid and massive expansion in the market for solar, wind and other renewabletechnologies and speed them toward an economic tipping point, after which theywouldbeontracktobecomethedominantenergyoptionontheplanet.Thepricesupportmechanismsneedto bestructured insuchawayas toreward the

mostefficientrenewableenergysuppliersandtogivethemanincentivetoreducecostsasrapidlyaspossible.TheconceptofadecliningtariffschedulementionedintheGGNDRoadMap(Paragraph2)seekstoensurethisbystipulatingthatpricesupportsdeclineanddisappearwithinadefinedperiodoftime(1020years).Producerswouldracetoenterthemarketaheadofthedecliningsubsidyandestablishtheircompetitivepositioninthemarketplace.Whereappropriate,countriescouldchooseadditionalpolicies(suchasrenewableportfoliostandardsandinnovativefinancingofupfrontcosts)thatwould

encourage utilities and local governments to bemore proactive in cooperatingwithrenewableenergysuppliers.If the GGND were launched immediately, the economics and the technologies of theworld energy sector could be transformed by 2025. With renewable energy costsbecoming competitive with fossil fuels, subsidies could soon be discontinued. Themajorityoftheworld'spoorwouldhaveaccesstoenergyfromaffordable,renewablesourcesthenewdefaultoption.


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D. A largescale global investment in renewable energy will bring

multipleeconomic,social,andenvironmentalbenefitsespecially

tothedevelopingworld.

The GGND would transform the global economy, to the great benefit of peopleeverywhere. For example, renewable energy is a much more effective engine foremploymentcreationthanfossilfuelbasedenergyproduction:researchsuggeststhatit

producestwotothreetimesasmanyjobs,incomparisonwithconventionalfossilbasedenergydevelopment.(PollinandGarrettPeltier,2008)

Windandsolarenergysystemsdohavetheproblemofintermittencythatis,theyarelessavailablewhenthewindisnotblowingorwhenthesunisobscuredandthiswillneedtobeaddressedinthecomingdecadeasthescalingupprocessgainsspeed.Buttechnologyisalsoadvancingintheareaofenergystorage.Initially,theexpansionof

intermittent renewable technologies might need to be accompanied by additionalconsumerguidanceon tailoring demand toavailability, as isoftenprovided inmany

developing countries whose energy systems are subject to frequent serviceinterruptions. More generally, renewable energy is also viewed as a more resilient,reliable,andsafetechnology:windandsolarbasedsystemsbreakdownfarlessoftenthanfossilfuelcombustionbasedsystems,theyaresimpler,lessdangeroustooperate,andfarlesspolluting.

For energy importers (a term that includesall but a handful ofcountries), economicstabilitywillalsobenefitfromcreatinga globalenergysectorthatis farlessrelianton

imports.Poorcountriesespeciallywillbeshieldedfromtheimpactsontheirbalanceofpaymentsandgrowthprospectsfromglobalpriceswingsandpeaks.The reduction in fossilfuel emissions will also bring significant health benefits by

reducingexposuretopollutantslikesootandgroundlevelozone.Andwhilerenewableenergyinstallationstakeupspaceonthelandorinthewater,thiscanbemanagedinwaysthatareminimallydisruptivetonaturalecosystems.

Private companies producing and installing renewable energy technologies, and theprivate banks and international financial institutions that finance them, are alreadysignificantbeneficiariesof theworld'stransition towardrenewableenergy.TheGGND

wouldcertainlyacceleratethattrendaswell.Butalsobenefittingwouldbecompaniesthatprovidematerialinputsforproductionofrenewableenergy,aswellascompaniesprovidingsuchassociatedservicesas smartgriddevelopment,smartmetering,energystorageandbatteries.Thesetechnologieswouldgetasignificantboostasabyproduct

oftheGGND,fromprivateinvestorsaswellasfrominternationalfinancinginstitutionssuchastheWorldBankandregionaldevelopmentbanks(whowouldplayacrucialrolein financing the development of smart grids, for example). All of this additional

economic activity would further accelerate the "virtuous cycle" of investment andtechnologyimprovement.AGGNDcouldbeanengineoftrue"greengrowth,"improvingpercapitaincomesandemploymentincountriesaroundtheworld.Thegreaterlevelsofjobgeneration,energyreliability, technology advance, and economic stability, together with reducedvulnerability to fossilfuel price fluctuations, can be expected to support the world'slongtermrecoveryfromtherecentfinancialcrisis.Overall, the GGND is expected to put the future world economy on a more solidfoundation for longtermsustainable development. Thisexpectation is supportedby


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United Nations economic models looking at the impact of high levels of publicinvestmentinlowemissionsenergy(WorldEconomicandSocialSurvey2009)aswellas relevantcase studies. In Germany,for example, approximately 280,000 jobs havebeencreatedinrenewableenergytwothirdsofthemasadirectresultofthecountry'srenewableenergylaws.Andtherateofjobgrowthisstillincreasing.(GermanMinistry

ofEnvironment,2009)

E. Direct public investment and investment support are essential;

offsets and other market mechanisms focused on the price of

carbonarenotsufficienttoachievethegoal.ThelogicoftheGGNDisstraightforward.Toaddressclimatechange,renewableenergymust bemade both competitive and affordable. To do this, the installed capacity of

renewableenergymustbeexpanded.Toexpandcapacity,therewillbeaneedforsomeform of subsidy in the near term, either from governments or from consumers.

Subsidiesforrenewableenergyarehappeningtoday,butinanuncoordinatedmanner.Newenergyinfrastructureisbeingbuiltrapidlyindevelopingcountries,buttheshareofrenewable energy is limited by the lack of financial and technological resources.Effectiveglobalcooperationintheformofadditionalfinancialresourcesandtechnologytransferwillbeneededtoscaleupthenationaleffortstotherequiredlevel.

TheGGNDsupportssimultaneousinvestmentintwoglobalgoods,namely,socialandeconomicdevelopmentbasedonrenewableenergy,andclimatestabilization.Itinvolves

publicinvestmentinenergyinfrastructureaswellasinvestmentsupporttorenewableenergy suppliers, to ensure adequate private rewards for supplying these socialbenefits.Itoffersastraightforwardbusinessproposition:dowellbydoinggood.Fornational economies, this largescale investment in bringing renewable energy to the

developingworldandmakingituniversallyaffordablewillbringbenefits,intermsofemployment,growth,greatermacroeconomicstabilityandenergysecurity.

Specific options formobilizing international finance for green energy investments indevelopingcountrieshavealreadybeguntobeexploredanddescribedinseveralrecentinstitutionalandindependentstudies(Stern,2009;Avato,2008;Mendona,2007;UNEPSEFI, 2009). Some of the mechanisms to raise the funds might include: traditional

government treasury bonds, "green" bonds linked to renewable energy investments,auctioningofnationalorinternationalCO2emissionallowances,carbontaxes,leviesoninternational passenger and freight transport, a tax on financial transactions, anallocationofdevelopedcountrySDRs,tonameafew.Carefulreviewoftheseandother

optionswouldbeamongthefirstordersofbusinessinplanningtheimplementationofaGlobalRenewableEnergyFund,withthelikelyconclusioninvolvingamixofoptions.Complementaryinvestmentsingriddevelopment(e.g.,transmissionlinesfromsolaror

windinstallationstocities)inthedevelopingcountrieswouldlikelybefinancedthroughexistingmechanismsandagenciessuchastheWorldBankandregionaldevelopmentbanks.Ofcourse,theneedforpolicydirectionandenhancedpublicsupporttoinvestmentinrenewable energy isnot limited to the developingworld. As noted above, the moststrikingsuccessesinswitchingto renewableenergyhavetakenplaceincountriesthatadopted feedin tariff programs. Similarly, as cited earlier, recent analyses in the UKsuggest that efforts to reduce carbon emissions by relying primarily on the marketdeliveronlyafractionofthedesiredresult(CommitteeonClimateChange,1999).Whilecapandtrade programs, carbon offset purchases, carbon taxes, and other economic


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instrumentswillcontinuetobehelpfuladditionstothepolicymix,theyappearunableon their own to stimulate the development of the market for carbonfree energysolutions at anything like the required pace to address climate change by makingrenewableenergyaffordabletothepoor.

Estimatesonthescaleofinvestmentrequiredtobringaboutatruetransformationinthe global energy sector vary, but a preliminary review of current learning curveanalysessuggeststhatinvestmentsatthe levelof approximately$100billionperyear,

deployed over a fifteenyear period, would be sufficient to increase the installedcapacityofrenewableenergytothepointwherecostsweredrawndowntothelevelofaffordability in developing countries. That is, in the next fifteen to twenty years(dependingonhowquicklyinvestmentswererampedup),cleanandrenewableenergy

couldcomedowntothe35centsperkilowatthourlevelthatwouldputitinreachofnearlyeveryoneontheplanet(Seebox,page3).

AdoptionandimplementationoftheGlobalGreenNewDealisnotdependentonraisingthat levelof investment immediately. Themechanismsdescribed here can beput in

placeat lower levels of investment,and then ramped upover a 35 year period (forexample), asadditional informationbecomesavailableon how thesemechanisms are

workingandasconfidencegrowsintheireffectiveness.Still,therearepayoffstoearlyandrapidscaleup(thatis,to frontloadinginvestments),both inprogressingtowardstheMillenniumDevelopmentGoals(MDGs)andinavoidingdangerousclimatechange.

Eachyearsdelayinreducingemissionsaddssignificantlytothecostsandreducesthechances of avoiding dangerous climate change (AVOID, Met Office Hadley Center,2009). But inability tomobilize funds for $100 billionperyear investments at theoutsetisnotareasontoforegothissignificantopportunitytocooperateincreatinga

sustainableenergyfuture.

A"globalfeedintariff"programofpricesupportforrenewablegeneratedelectricityisapaymentondeliverymechanism;fundsflowonlywhentheelectricitycomeson line,thatis,whenrealandtangiblebenefitsarebeingprovided.Experiencesuggeststhattheexistenceofan internationallyguaranteedpricesupportforrenewableenergywilladdressthetraditionalissuesofinvestorconfidenceassociatedwithrenewableenergy,

opening the door toprivate bank lending and otherdebt financiersof new capacity.(Experience in Spain suggests that banks and other financers see investments inrenewableenergy,backedupbya feedintariff,asverysafe;andDeutscheBanknotesthat withina consistent anddurable integratedpolicy framework incentives suchasfeedintariffsareakeydriverofinvestability(DBClimateChangeAdvisors,2009).)

F. A complementary global programof coordinated policyguidanceandlargescaleextensionactivitieswillensuresuccess.

While price is the principal obstacle to the spread of renewable energy in both thedevelopedandthedevelopingworld,itisnottheonlyone.TheGlobalGreenNewDeal

includes a commitment to a largescale program of policy and extension support.Creatingapredictableenablingenvironmentfortherapidspreadofthesetechnologiesisanessentialelementforthesuccessofthisstrategy.Thesehavebeenaddressedin

Points7,8,and9oftheRoadMapdescribedabove.Models for globally coordinated extension programs do exist. The GreenRevolution,

notwithstandingitsenvironmentalandsocialdrawbacks,doesprovideanexampleofaglobal strategy that delivered new technologies from the hands of a few hundred


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scientiststomillionsofpoorfarmers(mostofwhomwereilliterate)inpoorcountriesatabreathtakingspeedandscale.Theinnovationsincludedtheestablishmentofresearchinstitutesandextensionprogramstoassistfarmersandotheragriculturalsectoractorswith the adoption of new seeds and growing methods. These programs also helpedcreateintegratedsystemsofpolicy,technology,andcapacitythatensuredrapiduptake

andresulted,asiswidelyknown,ingreatlyincreasedagriculturalyields.Point 7 of the Road Map (Create a Network of Innovation Centers) envisages the

creationofasimilarnetworkofinstitutesandcenterstosupportboththedesignandharmonizationofpolicyandtheadoptionandadaptationofsuitablerenewableenergytechnologies.Whilethefundingandgoalsettingwillbeglobal,theimplementationofthe actual policies and energy systems must happen at the national level, with full

respectfornationaldifferencesandpreferences.Tofurtheracceleratetheprocess,Point8 oftheRoadMapproposestheestablishment

ofa"GlobalClimateConservationCorps,"aglobalcorpsofexpertsandextensionagentswho could back up the national institutions, provide training, technical support, and

helping hands. Ideally, experts in universities, technical institutions, industryassociations,andvolunteernetworkscouldbemobilizedthroughfinancialsupportas

wellasnetworkdevelopmenttoparticipateinaglobalenterprise.Participantsinthisprogram could be drawn from young entrants to related professions, experiencedprofessionals, and highlyskilled retirees from both the developing and developed

world.Forsome,themotivationtoparticipatewouldbetheidealofservice;forothers,especiallyyoungpeoplefromdevelopingcountries,theprogramwouldserveasonthejob training and an employment opportunity. It would also help to accelerate thedevelopmentof thenextgenerationoftechnicalexpertstoservicearapidlyexpanding

industry.

Sincerenewableenergyinstallationscanbedecentralizedandsmallscale,mechanismsand policies are needed to accommodate smallscale and offgrid installations,particularly in developing countries (see Point 6 of the Road Map). While large,industrialscale installations of solar, wind, andother technologies are central to theGlobal Green New Deal, the extension model is ideally suited to this additional

decentralizeddimensionandmediumandsmallscaleinstallations.These programs, in addition to materially supporting and accelerating theimplementationofarenewableenergyrevolution,willcreateaglobalfeelingofhopeandinspirationintangiblesthatareimportanttomeetingthechallengesweface.Inatimewhentheworldislockedinaliteralraceagainsttime,withboththeeradicationofpovertyandtherestorationofclimatestabilityasconjoinedgoals,theseprogramsofon

thegroundcooperationmayproveasimportanttosuccessasfinancialinvestmentsandtechnicaladvances.

G. Both renewable energy technologies and complementary

technologieswillbeadaptedtonationalsituations.Althoughexplicitmentionhasbeenmade above ofwindturbines, solar photovoltaic

arrays,solarheatconcentrators,waveandtidalenergyconvertors,andotheremergingrenewabletechnologiespowered(ultimately)byincomingsolarradiation,anumberofother technologies would be needed to achieve success. As noted earlier, the GGND

would include measures to support the adoption and diffusion of complementarytechnologies.Theseinclude:


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"Smartgrids"and"smartmeters."Thesearenowpickingupspeedinthedevelopedworld and should also be the focus of leapfrog technology efforts in the developingworld.

Efficiencytechnologies.Inthebuildingsector,rapidadvancesarepermittingdrasticreductionsintheenergyneedsofbothnewandretrofittedhousing.Light,heat,cooling,and other energydependent services can now be provided at fractions of previous

electricityconsumption,dependingonthedesignsandmaterialsusedandthemethodsemployed. The GGND should include mechanisms that encourage an equally rapidspreadinthesetechnologiesaswell.

Selectedspecificandacutepriorities. TheGGNDcouldpotentiallyincludeprovisionsto address a limited number of nongrid but energyrelated issues that have beenidentified as acute, globalscale problems, such as the black soot emitted by cooking

fires (which is both a serious health hazard and a dangerous addition to globalwarming).TheextensionprogramoftheGGNDcould,forexample,beusedinconcert

withpolicyandfinancemechanismstoplanandaccelerateaconversiontocleanerandmoresustainable cooking technologies. Indeed, thegreen revolution extensionmodel

appearswellsuited to fostering adoptionofnew cooking technology byhundreds ofmillionsofdispersedruralhouseholds.

Finally,theproposednetworkofresearchandpolicyinstitutionswouldkeepacloseandcontinuouseyeoninnovationsanddevelopmentsemergingaroundtheglobe.Itwouldprovideanalysesonnewopportunities to further improve the implementation of theprogramwithbettertechnologiesandadditionalpolicysupport.

Seizing the Opportunity for an Energy TransformationAtthishistoricaljuncture,theinternationalcommunityofnationsfacesunprecedented

challenges.Itmustfindawaytoaddressthefollowingsimultaneously:tostimulateandsustain global economic recovery, to end poverty, and to avert dangerous climatechange. The GGND is a strategy designed to contribute substantially to all three

objectives.Whiletherearedetailsremainingtobedeveloped,thebroadoutlinesareclear.Addressingthecloselylinkedchallengesofclimatechange,sustainableeconomicdevelopment, and global energy poverty will require greatly enhanced levels ofcooperationamongnationsarequirementthatinitselfcouldgenerateverypositive

impactsintermsofglobalunderstanding,trust,andcollaboration.

Thetransformationoftheworld'senergysectorisanopportunitynottobemissed.The

word "transformation" can often be misused but, in this case, the term is bothappropriateandtimely. Atransformationintheglobalenergysectorisnotoptionalifwearetoconfrontthechallengesweface,especiallythatofavertingdangerousclimatechange.Therapidgrowthinenergydemandindevelopingcountriesandan inevitable

declineintheavailabilityofcheapandabundantoilmakeanearlystartonarenewableenergytransformationallthemoreimperative.

A globalscale combination of targeted price supports, policy coordination, andextensionprogramstorampuprenewablesoverthenext1020yearshasthepotentialtomakethetransformationhappen.Bypushingdownthepriceofrenewableenergy,wecanraiselivingstandardsofpoorpeople,boostoureconomiesandsignificantlyincrease

ourchancesoflivinginaworldofrelativeclimatestability.


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It is realistic to imagine that implementation of this strategy couldbeginwithin twoyears of the conclusion of the Copenhagen climate summit (CoP15). Internationaldialoguenecessarily takes time, but two yearswould beadequate for anacceleratedprogramof fashioning therelevant globalpolicyagreements, thoroughlyinvestigating

thefinancingoptions,anddrawinguptheappropriateinstitutionaldesigns.Thistwoyear period of implementation planningwould afford the opportunity for additionalresearch and refinement as well as pilot testing, drawing on examples and models

aroundtheworld,ofthosemechanismsandprogramsenvisionedunderthisstrategy.Itwouldgive the international community the opportunity toestablish, in time for the20thanniversaryoftheUnitedNationsConferenceonEnvironmentandDevelopment,afullyconvincingandconfidenceinspiringresponsetothechallengesacknowledgedand

thepromisesmadeinAgenda21.Great global transitions do not happen instantaneously. Years of visionary thinking,

innovativeactions,andmanysmallstepsseemtoproduceonlymarginalresultsforaperiodoftime;butoncetheyreachatippingpoint,theircollectiveimpactgeneratesan

acceleratingvirtuouscycle,andtheoutcomebecomesoverwhelminglygreaterthanthesumoftheinitialincrementalsteps.

Soit can bewiththeadoptionand implementationof this strategy. The incrementalactions of nations, international institutions, and initiatives large and small, in the

public,private,andcivilsocietysectors,overmanyyears,havepavedthewayforthisopportunity.Thepartsareallthere.Itistimetosumthemuptomakeabigpushthatwillcarryusbeyondthetippingpointandtoachieveanimpactgreaterthanwhatwecurrentlybelievetobepossible.

ThetimehascomeforaGlobalGreenNewDeal.

SourcesAvato, Patrick, and Jonathan Coony (2008). Accelerating Clean Energy TechnologyResearch, Development, and Deployment: Lessons from Nonenergy Sectors. WorldBankWorkingPaperNo.138.

AVOID Met Office Hadley Center (2009). Can we achieve 2 C? Briefing paperpreparedbyAVOIDConsortium: MetOfficeHadley Center,Walker Institute, Tyndall

CentreforClimateChangeResearch,GranthamInstitute,UKDepartmentofEnergyand

ClimateChange.Banuri,Tariq(2007).Adevelopmentroundofclimatenegotiations.Paperpreparedfor

theStockholmEnvironmentInstitute.March.Birdsall,Nancy,andArvindSubramanian(withDanHammerandKevinUmmel)(2009).

EnergyNeedsandEfficiency,NotEmissions:ReframingtheClimateChangeNarrative.CenterforGlobalDevelopment,WorkingPaper187(November).CommitteeonClimateChange(UK)(2009).MeetingCarbonBudgets-theneedforastepchange.FirstannualprogressreporttotheUKgovernment.


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UnitedNations,Departmentof EconomicandSocialAffairs(UN/DESA)(2009).WorldEconomicandSocialSurvey2009:PromotingDevelopment,SavingthePlanet.United Nations Environment Program, Sustainable Energy Finance Initiative (UNEPSEFI) (2009). Public Finance Mechanisms to mobilise investment in climate change

mitigation: Anoverview ofmechanisms beingused today to help scale up the climatemitigationmarkets,withaparticularfocusonthecleanenergysector.AdvanceDraft.

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