The group, called the SEF Alliance, represents a groundbreaking collaboration across borders in a field that is increasingly recognised as critical for securing emissions reductions otherwise unattainable through regulation. In response to the global economic downturn, SEF Alliance members – including the UK Carbon Trust, Sustainable Development Technology Canada, Sitra, the Finnish Innovation Fund, and Sustainable Energy Ireland – commissioned an analysis of the connection between government clean energy spending and various measures of economic health. The report was prepared by Management Information Services, Inc. (MISI), an internationally recognised economic research firm based in the US.
In “Why Clean Energy Public Investment Makes Economic Sense – The Evidence Base”, MISI has compiled and assessed the latest and most comprehensive evidence linking government clean energy spending with key indicators of economic health, such as job creation and growth. It finds that countercyclical investment in sustainable energy is a sound response to recession when economic factors are considered alone, independently from demands of the global ecosystem.
“The world recognises the importance of clean energy technology and, in that regard, finance remains a high priority for realising this societal opportunity,” says Professor J. Owen Lewis, CEO of Sustainable Energy Ireland, one of the founding member organisations of the SEF Alliance. “That is why this economic impact study remains timely and significant.”
The report finds that green spending creates more jobs, per dollar, than most other types of stimulus spending; and 3 to 4 times as many jobs, per dollar, as tax cuts. Notably, the report further states that green investment is one of the most effective types of economic stimulus spending in terms of both job creation and economic growth, as well as providing various other economic and environmental benefits. Investments in clean energy and energy efficiency programmes increase GDP, incomes, and jobs, reduce pollution and greenhouse gas (GHG) emissions, save energy, reduce energy costs, and reduce energy price fluctuations.
“The topic of direct investment by governments in clean energy is increasingly recognised as essential for filling financing gaps, overcoming market barriers, and scaling up commercial investment in the low carbon economy,” says Achim Steiner, Executive Director of the UNEP. The report’s findings reinforce UNEP’s call for a global green new deal in response to the financial and economic crisis. Clean energy can be a key driver in the transition toward a green economy.
The SEF Alliance is a main component of UNEP’s work in this arena and comprises a coalition of public clean energy funds launched by UNEP in 2008 together with the Oak Foundation and a core group of founding member organisations from the UK, Canada, Finland, Ireland and the United States. The aim of the Alliance is to provide clean energy public fund managers with an international channel for collaboration with each other and is the first international platform explicitly dedicated to growing the expertise of public fund managers in the design and implementation of clean energy public financing mechanisms.
The role of public fund managers is distinctly different from that of private fund managers. Whereas private funds are ultimately seeking a monetary return on investment, the goals of public funds are much more complex. They aim to complement the private sector without crowding out commercial investment, to fill financing gaps and to overcome niche market barriers that the private sector cannot or will not address – all while demonstrating the best value-for-money to the sponsoring government according to its various policy goals.
“Clean energy public fund management is a very important field of competence in the world today,” says Jamie Brown, who manages the Secretariat of the Alliance from its main office in Basel, Switzerland. “It’s also relatively new and experimental. Fund managers are still learning and discovering the best ways to accelerate the development of clean energy markets from a public interest perspective.”
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