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Renewable energy market needs investment-friendly policies – UN agency

Renewable energy market needs investment-friendly policies – UN agency

In a world thirsting for new energy sources, the United Nations environmental agency is calling for more leadership from policy makers and action by financial institutions to encourage investment in renewable energy, a field with an estimated market potential of nearly $2 trillion in the next 15 years.

"CEO Brief: Renewable Energy," a study released at the four-day International Conference on Renewable Energies in Bonn, Germany, the largest gathering of leaders in the sustainable energy finance sector, is the third report by the Climate Change Working Group of the UN Environment Programme Finance Initiative (UNEP FI).

Presenting the business case, it stresses a $1.9 trillion potential for renewable energy markets over 15 years, but only if "real concerns" by the financial sector are addressed. Renewable energy includes such sources as hydro, wind, solar thermal and geothermal power, bioenergy and photovoltaics.

"The world needs more energy, but conventional sources are unsustainable and finite," the chairman of the UNEP FI Climate Change Working Group, Thomas Loster, told the conference yesterday.

The most important step for policy-makers is to create confidence in the long-term future of the renewable energy market by policies that make "the deal on the table" financially attractive, Mr. Loster, Head of Weather/Climate Risks Research at the Munich Reinsurance Company, added.

“It's time to get down to business,” UNEP Executive Director Klaus Toepfer told the meeting. Affordable finance will be needed to implement the international action plan being developed at the conference, he added, agreeing with financiers that governments need to "get real" with the policies to make that happen.

"Sustainable development needs sustainable energy, but sustainable energy needs investment," he said, urging the 275 participants to develop new products for the rapidly evolving renewable energy sector.

The report details several important case studies highlighting both the opportunities and challenges in renewable energy finance and represents the work of key financial institutions - ANZ, Aviva, Citigroup, Dresdner Bank, Garant, HypoVereinsbank, and Munich Re.