The energy transition under way around the world will cost trillions of dollars annually and require a large wealth transfer from developed countries — which grew wealthy off the back of cheap fossil fuels — to poor countries in order to reduce emissions and assist them in protecting their economies
from climate change as well as continuing to tackle poverty.
Development banks and the private sector (at home and abroad) will also have large parts to play in financing the switch to renewable energy systems in countries that otherwise wouldn’t be able to afford to.
Yes, it’s a hard sell in a world dealing with stretched finances from responding to the Covid-19 pandemic, war in Ukraine, a bout of high inflation and slowing economies — and where countries are also working out how to fund their own energy transitions and adaptation to a changing climate.
Worse, it’s a world that is not spending anywhere near enough at present; $2.4 trillion was spent on climate initiatives and development combined in 2019, the latest year for which reliable data are available.
But it’s a world that will face far greater costs in future if it does not rise to this challenge.
In doing so, the world needs continued innovation and proven models that successfully match innovators with private finance.
It is in this context most of all that we should welcome the announcement yesterday that one of the world’s largest asset managers, BlackRock, has committed to raising $NZ2 billion for a climate infrastructure fund focused on assisting New Zealand to be the first country in the world with 100 percent renewable energy, and a goal of achieving this by 2030.
That came with the endorsement of this country yesterday as a global leader in clean tech and climate infrastructure; it helps, too, that our electricity sector is already 83 percent renewable energy.
BlackRock chairman Larry Fink has been caught up in the culture wars and become something of a hate figure in right-wing politics in the United States for his promotion of ESG (environmental, social and governance) investing. He pushes a message of sustainability, now — which has a clearer focus on what businesses need to be keeping an eye on for their long-term future and profitability.
Fink says this is the largest single-country, low-carbon transition investment initiative his company has created to date. He also notes that “the world is looking for models of co-operation between the private and public sectors to ensure an orderly, just and fair energy transition”.
People who moan about climate initiatives in New Zealand having a negligible impact globally can perhaps celebrate this one.
Playing a part in global transition
A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.
Opinion
The energy transition under way around the world will cost trillions of dollars annually and require a large wealth transfer from developed countries — which grew wealthy off the back of cheap fossil fuels — to poor countries in order to reduce emissions and assist them in protecting their economies
