Clean Energy Investment

The document argues that public funding for clean energy in developing countries is insufficient and that the private sector must be the primary driver of investment. It identifies two main categories of obstacles: international investment agreements (IIAs), which may expose governments to arbitration over climate regulations, and domestic policy barriers, such as lack of clear energy signals and monopoly structures. The author suggests that technology transfer is essentially an investment problem and recommends diagnostic national studies, similar to the WTO's Integrated Framework, to identify and remove these barriers.

• There is a critical gap between current public funding and the investment needed for clean energy in developing countries. Even if funds like the $10 billion Clean Technology Fund were renewed annually until 2050, they would represent less than 1% of the needs projected by the IEA for its reference case.
• Private sector investment in clean energy is growing rapidly—increasing from $30 billion globally in 2004 to $117 billion in 2007—but remains far below the required levels. The IEA's projected need of $22 trillion in new energy investment between 2005 and 2030 averages out to sixteen times the annual asset financing currently provided by the private sector.
• International investment agreements (IIAs) may restrict the ability of governments to regulate in favor of clean energy. Specifically, policies that limit GHG emissions from existing installations or demand retrofits could be challenged as 'indirect expropriation' or a violation of 'fair and equitable treatment' obligations, potentially leading to binding compensable arbitration.
• Domestic policy and regulatory barriers significantly hinder clean energy investment, particularly in least developed countries. These obstacles include a lack of clear future energy policy signals, monopoly structures, absence of feed-in tariffs, subsidies for conventional energy, and a lack of experience within the domestic financial sector regarding new technologies.
• Technology transfer should be viewed as an investment problem rather than just a technical or legal one. Improving the domestic investment environment to make host countries more attractive to private investors is identified as one of the most effective policy options for achieving technology transfer.
• The author proposes using diagnostic national studies to identify specific investment obstacles, mirroring the WTO's Integrated Framework for Trade-Related Technical Assistance to Least Developed Countries. This process would require collaboration between the WTO, IEA, World Bank, and other partners.

APA

Cosbey, A. (2008). Clean Energy Investment. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/cph_trade_climate_investment.pdf

Chicago

Cosbey, Aaron. Clean Energy Investment. International Institute for Sustainable Development, 2008. https://www.iisd.org/system/files/publications/cph_trade_climate_investment.pdf.

Wikipedia

{{cite report |last1=Cosbey |first1=Aaron |title=Clean Energy Investment |publisher=International Institute for Sustainable Development |date=August 2008 |url=https://www.iisd.org/system/files/publications/cph_trade_climate_investment.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

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