US debates climate impact of development investments

Carey L. Biron in IPS: A debate is heating up [in Washington] over the extent to which U.S. government-facilitated private-sector development investments should be required to take into account how those ventures impact on climate change.

The discussions focus on a small and relatively little-known federal agency, the Overseas Private Investment Corporation (OPIC), the government office in charge of mobilising private capital in pursuit of international development priorities. While OPIC generally receives high marks, in recent years some groups have been particularly impressed by the agency’s focus on investments in small-scale, de-centralised renewable energy projects.

 “Outside of USAID” – the government’s main foreign aid arm – “OPIC is investing pretty much the only U.S. [government] money specifically for off-grid clean energy that directly supports clean energy access for the poor,” Justin Guay, a Washington representative for the Sierra Club, a conservation and advocacy group, told IPS.

“Any energy investment today by most agencies is about ‘energy access’, but this is disingenuous because that energy goes into the grid and the vast majority is then consumed by the rich and by large companies. Without associated infrastructure to rural areas or to make energy affordable for the poor, most of these investments are just increasing the general supply.”

OPIC’s mandate is set to run out soon, and Congress is currently tasked with figuring out the details of its re-authorisation. The Sierra Club and some other groups are warning that new legislation could undermine the agency’s unique coupling of climate-related and anti-poverty aims.

...Last week, OPIC and 14 other development institutions agreed for the first time to “substantially scale up” their green investments in developing countries, with the aim of collecting 100 billion dollars a year for the effort by 2020.  “The challenges of transitioning to a green economy are far outweighed by benefits of job creation, innovation and poverty alleviation,” Elizabeth Littlefield, OPIC’s president, said following the meeting....

A solar panel has replaced a windmill powering a water pump in Augrabies National Park in South Africa, shot by NJR ZA, Wikimedia Commons, under the Creative Commons Attribution-Share Alike 3.0 Unported license