There has been a lot of lead up to the Paris Climate Summit (COP21) with plenty of discussions that exemplify the hope, anxiety, skepticism, and enthusiasm revolving around the summit. My experience at the talks has been influenced by the atmosphere, which for the most part has been determined by a high sense of urgency by predominantly developing markets.
Representatives from both the private and public sector, and from emerging and developed economies, are bent on ensuring that we put money, efforts and focus towards a sustainable future. Many of the current discussions and sessions are seeking ways to use technological innovation and collaboration to economically grow whilst lessening the negative environmental impact.
We’re all in this together
The biggest opportunity, realisation and also source of contention has been about how to ensure economic growth in emerging economies through sustainable means. The source of contention seems to stem from the difficulty to come up with a solution to the issue – which has been the problem at previous climate talks – because there are different motivations and both emerging and developed economies want to continue economic developments.
At the same time, emerging economies are
predominantly building their energy systems with clean energy. Many emerging economies have already reached a 20% renewable energy capacity and show further progress by developing new innovative solutions, for instance with storage and energy efficient applications. This will eventually provide a competitive advantage for these countries. Their products will be produced with renewable energy where the already developed economies are likely to still produce their products with fossil fuel based energy. Developed economies need to step up to the plate and invest in renewable technologies and innovation. In the end, climate change is one of the most important challenges all countries face, regardless of their economic development.
Renewable energy in emerging markets
There are many examples of successful renewable energy projects in emerging markets. At Triodos Investment Management, we recently added Lake Turkana Wind Park in Kenya, Cohessa solar power in Honduras, a Run-of-the-river water power station in Nepal and M-KOPA Solar to our growing renewable energy portfolio in emerging and developing economies. The latter company was founded by former American executives, one of whom was behind M-PESA, the world’s leading mobile payment platform.
M-KOPA uses an innovative approach to give low-income households in East Africa access to power by combining mobile payments with GSM sensor technology to enable households to buy a solar panel system at an affordable price. M-KOPA is a primary example of how emerging economies tend to leapfrog developed economies in renewable energy development. In order to address the challenges they face, innovation is high and adaptation is even higher. Developed economies can learn from this adaptation rate and ability to think outside the box while achieving economic growth.
The next steps
For each session that I attended, the conversation always landed on how to roll out viable solutions and we must look to emerging economies that have the capabilities and need to continue to grow economically and have the highest adaptation rate. In the end, the next innovation and biggest progress will likely come from emerging not developed countries or through an integrated collaboration between both.
Renewable Energy
Triodos Investment Management has been financing renewable energy for more than 25 years and is a partner of first choice for a relative large amount of developers and investors in the renewable energy sector. Triodos Investment Management considers energy to be a basic human need and therefore something that we need to ensure is being generated and used on a sustainable basis for future generations.
For an overview of our activities in energy and climate, please visit the Energy and Climate investment strategy page and for an overview on our activities in emerging markets, please visit the Emerging Markets investment strategy.