Helping governments and the finance sector mainstream investment in sustainable energy and remove market distortions is a main focus of UNEP’s work in the area of climate change mitigation. UNEP’s Energy Branch works on cleaner energy policy, technology and finance to create an enabling environment for sustainable energy – one which promotes reduced greenhouse gas emissions through increased energy efficiency and renewable energy use.
UNEP activities facilitate access to energy markets and accelerate the development and dissemination of affordable clean energy technologies and processes. The link between good policies and adequate finance is essential to drive the transfer of technologies that can mitigate climate change. Supported and complemented by a number of collaborating centres, and through hands on involvement in groundbreaking international networking efforts, UNEP has become a main player in efforts to support climate change mitigation.
Clean energy policy
Climate change and other environmental and development issues are strongly interlinked, and therefore offer opportunity for progress in several areas. With its focus on striking a balance between environmental and socio-economic concerns, UNEP’s bioenergy programme is a case in point. Activities include technical support to the Roundtable on Sustainable Biofuels and the Global Bioenergy Partnership, which fosters sound bioenergy planning and policy frameworks which are conducive to small agribusiness development. In addition, UNEP participates in the BioTop Project, which seeks to identify technical opportunities and research needs for Latin America, against a background of growth in the European biofuel sector.
A Global Environment Facility-sponsored project, the Solar and Wind Energy Resource Assessment was a five year effort launched in 2001 with the aim of developing information tools to stimulate renewable energy development. It covered major areas of 13 developing countries in Latin America, the Caribbean, Africa and Asia. Ultimately the project supported informed decision making and helped increase investor confidence in renewable energy projects. Building on the success of the project, UNEP is expanding its work in this area to provide information on renewable energy potential, analyses of renewable energy policy effectiveness, information in support of risk management related to renewable energy project development, and project-specific information on solar and wind energy technologies.
UNEP is also building institutional capacity on energy efficiency policy in developing countries. For example, some of the centres in the joint UNIDO UNEP network of National Cleaner Production Centres successfully tested a programme to improve industrial energy efficiency. The effort has not been limited to governmental agencies, with UNEP also working with private sector stakeholders in the building and construction industry to promote more energy efficient buildings, and with car manufacturers, oil companies and local authorities to promote more efficient transport policies.
Clean energy technology
UNEP’s efforts to promote technology transfer in support of UNFCCC objectives include a programme on environmental technology assessment, work focused on increasing trade in environmental technologies and services, and local project development in transition economies aimed at developing clean energy funds and energy service companies. All of these efforts are different, yet they rely on similar mechanisms to achieve their goals: notably UNEP’s convening power and proven ability to work in a multi-stakeholder environment, including with the private sector.
Building on the capacity strengthening and networking experience gained in the context of the Montreal Protocol on Substances that Deplete the Ozone Layer, UNEP is extending this approach to the realm of climate change mitigation. Experience shows that networks can play a strong role in assisting developing country officials to acquire knowledge that allows them to do their jobs more efficiently and with greater confidence and speed.
Clean energy finance
UNEP is aiming to increase investment in clean energy projects both internationally and in specific target countries. To this end UNEP looks for niches, such as the finance sector, where small efforts can leverage much larger changes. UNEP’s innovative bank loan programmes, for example, allow banks to offer credit facilities that help consumers finance the purchase of solar electric systems and water heating.
Through the Indian Solar Loan Programme, UNEP partnered with two of India’s largest banks over three years to finance more than 20,000 solar lighting systems through more than 2,000 participating bank branches. The programme helped more than 100,000 people access clean renewable energyand prompted 20 other Indian banks to develop similar credit programmes. In 2007 the programme won the Energy Globe Award and in 2008 it received a UN21 award from the UN Secretary-General.
A second bank partnership programme in Tunisia, PROSOL, has helped 35,000 families finance the installation of solar water heaters, increasing the national market for this clean technology eight-fold in three years. Similar programmes are now in operation in Morocco and Egypt, with new programmes planned for Montenegro, Albania, Macedonia, Mexico and Chile.
At the interface of development and finance, UNEP is helping develop markets for clean energy in rural areas. By providing enterprise development services and early stage seed finance, the Rural Energy Enterprise Development Initiative (REED) has nurtured more than 50 new clean energy enterprises in developing countries, providing better energy services to more than 400,000 people. Building on this experience, the Seed Capital Assistance Facility, jointly implemented with the Asian Development Bank and the African Development Bank, will help close the gap between investment returns offered by early stage sustainable energy entrepreneurs and those required by the investment community.
UNEP complements its consumer and seed finance country-level activities with efforts to support broader financier engagement in the new climate mitigation sectors. Notable among this effort is the Sustainable Energy Finance Initiative (SEFI), which fosters investment in sustainable energy by providing financiers with tools, support and information, such as the 2008 Global Trends in Sustainable Energy Investment. SEFI has also launched the SEF Alliance, a network of public finance institutions, and is working with the UNFCCC to examine how public finance mechanisms could form part of a future climate agreement. UNEP is also working with the insurance industry to develop products that mitigate risks for sustainable energy projects, such as when a wind farm produces less electricity than envisaged.
Also with a focus on the poorest countries, and through its Risoe Centre on Energy, Climate and Sustainable Development (URC), UNEP provides technical and financial support to developing countries so they can participate in the Clean Development Mechanism (CDM) and other international efforts to address climate change and promote sustainable development. The CD4CDM and related projects are helping 32 developing countries participate in the CDM. URC also facilitates developing countries’ participation in the dynamic developing carbon market. URC’s Energy and Carbon Finance Programme continuously analyzes market barriers, the actions needed to overcome them, and ways to strengthen emerging CDM sectors.
International networks
Harnessing the abilities of complementary organizations and initiatives though targeted networking efforts has proven a powerful mechanism to catalyze change at a scale which would not otherwise be possible, given UNEP’s limited resources. UNEP is strongly involved in the operations of two such networking efforts: the Global Network on Energy for Sustainable Development (GNESD) and the Renewable Energy Policy Network for the 21st Century (REN21), cohosted with the German technical cooperation enterprise GTZ. GNESD is a collaboration of more than 20 centres of xcellence in both developing and industrialized countries noted for their work on energy, development and environmental issues. A new GNESD study has just examined in detail the links between energy and the Millennium Development Goals. REN21 supports policy development and decision making at the local, national and international levels to facilitate a rapid expansion of renewable energy. REN21’s annual Global Status Report has become an industry standard.
Efforts by UNEP to improve energy efficiency in the building and transport sectors also feature a strong networking component, working with key stakeholders from the building and construction industry, as well as with car manufacturers, oil companies and local authorities.
Examples of UNEP’s work in mitigation:
- UNEP is building capacity in 25 developing countries which will allow them to participate in the Clean Development Mechanism and global carbon markets. UNEP is also working with UNDP and the World Bank to expand coverage of these activities.
- The UNEP-facilitated Global Network on Energy for Sustainable Development engages more than 20 centres of excellence in developing and industrialized countries to provide policy solutions for clean and efficient energy sources for the world’s poor.
- UNEP renewable energy activities include supporting the development of criteria for the sustainable production of biofuels, and ensuring that these contribute to climate, energy and environmental goals.
- The Sustainable Buildings and Construction Initiative is promoting energy efficiency in different building sectors and investigating how market mechanisms can support energy efficiency investments.
- The Sustainable Transport Programme is promoting less polluting transport systems and mobility options.
- The Rural Energy Enterprise Development (REED) initiative nurtures new, clean energy enterprises in developing countries by providing enterprise development services and early stage seed finance.
- The UNEP World Conservation Monitoring Centre has reviewed the impact on livelihoods of reducing emissions from deforestation
UNEP's GEF Portfolio for Climate Change - Mitigation
UNEP accesses resources from the Global Environment Facility to help developing countries reduce there green house gas emissions in the following areas: transport; renewable energy and energy efficiency. In the renewable energy sector the portfolio includes projects supporting many forms of renewable energy including, geothermal power, wind power and hydro power, and power from biomass. In energy efficiency, the portfolio includes the promotion of energy efficiency in buildings, the promotion of energy efficient lighting and energy efficiency in industry. The the transport sector the portfolio has focused on bus rapid transit, as a low cost way of improving traffic flows in cash constrained cities.