Clean Energy Investment

The report identifies a critical gap between the investment needed for clean energy in developing countries and current funding levels, arguing that the private sector must be the primary driver. It details domestic barriers such as political instability, lack of clear energy policies, and financial system deficiencies, while proposing incentives like feed-in tariffs and microfinance. Additionally, it examines how International Investment Agreements (IIAs), including the Energy Charter Treaty and the ECOWAS Energy Protocol, can either facilitate or restrict a state's regulatory space to implement climate-related policies due to protections against indirect expropriation and requirements for fair and equitable treatment.

• There is a massive shortfall in funding for clean energy in developing countries; even if the $10 billion Clean Technology Fund and similar contributions from Japan, the US, and the UK were renewed annually until 2050, they would provide less than 1% of the investment needs projected by the IEA.
• Private sector investment in clean energy grew rapidly from $30 billion globally in 2004 to $148 billion by 2007, yet this remains far below the IEA's projected need of $22 trillion in new energy investment between 2005 and 2030.
• Domestic barriers to clean energy investment include a lack of clear energy policy signals, the prevalence of state monopolies that block independent power producers, and discriminatory grid policies that penalize intermittent renewable generators.
• Clean energy technologies face higher capital and transaction costs compared to conventional energy, and are often hindered by a 'chicken-and-egg' cycle where low demand keeps prices high due to a lack of economies of scale.
• International Investment Agreements (IIAs) can create 'regulatory chill' by allowing foreign investors to claim damages for 'indirect expropriation' or breach of 'fair and equitable treatment' when governments introduce new environmental regulations or close polluting facilities.
• Effective incentives for clean energy in developing countries include the implementation of Renewables Portfolio Standards (RPS), feed-in tariffs, net-metering, and the use of microfinance to support end-users in rural areas.

APA

Cosbey, A., Ellis, J., Malik, M., & Mann, H. (2008). Clean Energy Investment. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/cei_synthesis.pdf

Chicago

Cosbey, Aaron, Jennifer Ellis, Mahnaz Malik, and Howard Mann. Clean Energy Investment. International Institute for Sustainable Development, 2008. https://www.iisd.org/system/files/publications/cei_synthesis.pdf.

Wikipedia

{{cite report |last1=Cosbey |first1=Aaron |last2=Ellis |first2=Jennifer |last3=Malik |first3=Mahnaz |last4=Mann |first4=Howard |title=Clean Energy Investment |publisher=International Institute for Sustainable Development |date=July 2008 |url=https://www.iisd.org/system/files/publications/cei_synthesis.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cosbey2008clean, author = {Cosbey, Aaron and Ellis, Jennifer and Malik, Mahnaz and Mann, Howard}, title = {{Clean Energy Investment}}, institution = {International Institute for Sustainable Development}, year = {2008}, month = jul, url = {https://www.iisd.org/system/files/publications/cei_synthesis.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }