Towards a Global Green Recovery – Supporting Green Technology Markets
Atlantic Task Force recommendations to the Policy Planning Staff of the German Federal Foreign Office
26 August 2009
Prepared by the Atlantic Initiative, Berlin
Author: Jan-Friedrich Kallmorgen
In cooperation with Aaron Best, Senior Fellow, Ecologic Institute, and Alexander Ochs, Director, Forum for Atlantic Climate and Energy Talks (FACET)
The Atlantic Task Force derived recommendations in three broad areas: I) generating new sources of revenues to fund green technologies; II) intensifying dialogue on existing national green policies; and III) spurring new international co-operation on green technologies.The first set of recommendations focuses on the question of how to meet growing demand for public and private funding of green technologies. While it is easy to ask for more public spending, governments will face significant budget restrains in the next few years due to the financial crisis. In order to generate new sources of revenues to fund green technologies, the Atlantic Task Force recommends the following measures to Germany, the UK and the US:
• Order international public financial institutions to make the financing of renewable-energy projects a priority providing at least 20% of new loans for energy efficiency and renewable energies.
• Lift the percentage of auctioning revenues from emissions trading that must be reinvested in green projects inside and outside of the emissions-trading sectors to 50% by 2015 and 100% by 2020.
• Generate new funding by auctioning national emission allowances under the UNFCCC system or through taxes on air tickets or bunker fuels.
• Start to develop a market for “green bonds“ that allows cheap refinancing and gives tax incentives to consumers with the proceeds to be directly invested in renewable-energy projects.
The second set of recommendations focuses on the question of how Germany, the UK and the US and the other G20 countries can intensify the dialogue on existing national green policies to mutually learn from each other and share best practices. To this end, the Task Force recommends the following:
• Extend public procurement of clean technology. Leading by example, federal agencies should make their procurements as carbon neutral and encourage cities, municipalities and other public entities to buy a certain percentage of their energy needs from renewable sources to set an example. The initial focus should be on low-emissions transport (public transport, government vehicles, military equipment); green buildings; and IT.
• The Transatlantic Economic Council should implement “Top Runner” approaches with cooperative identification of efficiency standards based on leading products and technologies to continuously raise the performance bar and position firms in a strong position to capture global market share.
• Establish a best-practices roundtable on cleantech at the next G20 meeting focusing on a) feed-in tariffs as they have been proven to be an immensely successful tool for promoting investment in renewable electricity generation; and b) on lessons learned from the EU Emissions Trading Scheme as there is no need to repeat elsewhere the same initial mistakes made in the setup of the EU ETS.
The third set of recommendations focuses on new international co-operation on green technologies to spur breakthroughs in the areas of energy efficiency, electric mobility, plus-energy houses, solar power as well as CCS technologies. Here, the most important recommended measures include the following:
• Create an Web 2.0 Cleantech Investment Forum. Building on the idea of the Transatlantic Climate Bridge the Federal Foreign Office should fund a Web 2.0-based platform to help renewable energy companies and entrepreneurs finance their innovations and projects. The Forum would serve as a one-stop hub with an efficient search system connecting public money, private investors, and cleantech business/entrepreneurs at one’s fingertips. Its three major elements should be a userfriendly central database of all public money available for renewable energy in G20 countries or at least in the US, UK, and Germany; an online matchmaking platform for private investors around the world; and a central hub for services regarding renewable energy.
• Analyzse in which areas a greater harmonization of green technology standards, codes and contractual principles makes sense, encourage the development of common patent standards and facilitate greater coordination in dealing with counterfeiting and piracy. A transatlantic or G20 workshop group should develop contractual principles for businesses engaging in green-technology licensing in developing countries. In addition, Eco-Patent Commons should be supported. Finally, bilateral code acceptance agreements should be given high priority as differences in building- and construction-code standards pose the biggest barriers of entry to technology-developing companies from any country seeking to transfer these technologies to the other markets.
• Establish a transatlantic panel to analyse current green-technology initiatives and their potential environmental, economic and social costs and benefits and assess how current programs could be improved within each country. The panel should also suggest how best practices can best be emulated in other countries’ political realms.
• Bundle research and expertise from academia, engineering/business, finance and politics across the G20 to develop mechanisms, rules and norms that can help foster the creation of clean-technology markets. The focus should be on low-cost solar photovoltaic, energy storage, electric mobility and fuel cells.
• Define legitimate forms of public “green” aid through agreements that state support to specific green activities (in terms of subsidies, tax reductions or any other form) are non-discriminatory.
State-aid practices, procurement policies and subsidies should be harmonized with a maximum of transparency.
• Work with the Carbon Disclosure Project to push the campaign for disclosure of carbon emissions within balance sheets in order to evaluate the “carbon footprint” of companies.
• Set up public-private partnerships for large-scale G20 demonstration and flagship projects in electric mobility, energy storage, power generation, efficiency and CCS
• Open and sustain the markets for green technologies through better trade policy by discontinuing direct or hidden subsidies to climate-changing activities. The G20 should make green aid a priority issue at the WTO level.
• Expand and reform climate-related development assistance as part the UNFCCC process to align national development targets with global environmental objectives.
• Establish a permanent group of "Energy and Climate Sherpas” in the G20 process. The high-level staff of the Heads of State and Government and the ministers should meet regularly, in order to interlock efforts and align priorities on multiple levels.