21 Replies Latest reply: Sep 1, 2017 11:09 PM by jordon RSS

    How can Iraq shift from dependence on fossil fuels to green financing ?

    mohammedclimitchange C4D Enthusiast

      How can Iraq shift from dependence on fossil fuels to green financing and it is steeped in the same global crisis and all institutions lack the important laws through which they can engage the private sector, an important element in the next phase of GEF 7?

        • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
          wt48 C4D Expert

          Great post Mohammed,    It is a really important question that you ask.   I would suggest you consider using this CoP to help build your knowledge base.  Perhaps focus on how to help policy makers to understand the huge potential for creating jobs of the future in alternative energy fields.   I am not familiar with the GEF process so I have limited understanding of possible entry points where current energy institutions might be able to consider investments in green financing.  

          • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
            wt48 C4D Expert

            I definitely would like to recommend that you read a new McKinsey Global Institute Aug17 report "The New Dynamics of Financial Globalization".  After your intervention, I went back to review Parts 3 and 4 of that report.  I would suggest gathering together with your colleagues in Iraq to do some 'forward-looking', and make some suggestions about how to achieve stability taking into consideration some of the 'old and new' risks in your society today.   Best wishes

            • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
              pasqualelucioscandizzo C4D Enthusiast

               

               

              Perhaps I can suggest some general principles for action.  First, some political consensus is necessary to establish the legitimacy and the necessary impetus for greening as a policy objective. This requires goal setting and a commitment to design and align policies across and within levels of government. While in Iraq there may be other and more urgent priorities, such as reconstruction and institution building, the need to establish goals for inclusive green growth has global significance as one of the guiding principles of domestic and international policies (see for example the agreement with the EU). Second, given these goals and the political will to pursue them, specific financial policies, regulations, tools and instruments should be established that provide transitional support for new green technologies. Third, policies should also be established  to enable investment and strengthen market incentives for low carbon infrastructure. Finally both domestic and international green finance (including  green bonds, ETS and PES),  should be used  for harnessing resources and building capacity, promoting green business and consumer behavior. Blended finance could also be used to increase the leverage of the green components to support investment in renewable energy and in a whole host of related projects aiming at improving the environment and reducing the carbon footprint.

              • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
                mexico C4D Explorer

                Very relevant but not an easy question for a straightforward answer. Given that Iraq falls under the category of fragile/post-conflict countries, perhaps you need a set of preconditions for considering shifting to green financing in the country. Among them are political consensus/stability, and an enabling environment for the private sector.

                • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
                  1125555 C4D Explorer

                  Dear Mohammed. Hi, this is David Rodgers at the Global Environment Facility. You are right! We are working hard to help countries better engage private sector in our upcoming GEF-7 cycle. AND you are also right that countries need to take some essential steps to help ensure the right enabling environment so that private sector companies can invest and grow. Several other replies to your question offer excellent points. For our part, GEF and its partners agencies often use 4-5 different types of interventions, usually in combination, to help countries engage with private sector:

                  1) Transforming policy and regulatory environments

                  2) Deploying innovative financial instruments

                  3) Convening multi-stakeholder alliances

                  4) Strengthening institutional capacity and decision-making

                  5) Demonstrating innovative approaches

                  Sometimes these interventions happen at the National level; but also sometimes at the sub-national level. Sometimes Universities or Institutes can lead the way. In almost every country, SMEs generate the bulk of jobs and can be real innovators for sustainable energy and low-carbon development when provided the right capacity and financing.


                  You may also find some interesting materials in a recent UNDP report on "de-risking" for renewable energy at Derisking Renewable Energy Investment | UNDP

                  Also, Bloomberg New Energy Finance issues a report called ClimateScope that assess the investment climate in many countries Check out: Climatescope 2016


                  Best of luck in your continued research and strategic thinking.

                   

                  • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
                    kmzz C4D Connoisseur

                    Fantastic answers so far. Thanks all!

                     

                    Like David Rodgers, I am of the opinion that a transition from depending on fossil fuel towards a more diversified and greener economy can start with piloting examples at decentralised levels. Here a brandnew UNEP publication on mobilising green finance for SMEs in G7 countries (Jun 2017).

                    Perhaps a recent example to watch is Saudi Arabia's plan to diversify its energy mix and its Vision 2030 (article May 2016).


                    According to a post by the Solar GCC Alliance (Dec 2014), it seems, Dubai Supreme Energy Council (DSCE) signed an advisory service agreement with the World Bank in that same year to design a funding strategy for Dubai’s green investment program. Perhaps our members from World Bank can provide some inputs from this (or similar) experience.


                    Possible financial instruments mentioned include green bonds and sukuk (the Islamic equivalent of bonds), also see Olha's recent post on Malaysia who pioneered in incorporating "green and socially sustainable" into the sukuk instrument.

                     

                    The Huffington Post (Jan 2017) mentions three practical steps that stand out to mobilise (and shift) private capital into low-carbon opportunities:

                    1. rolling out sustainable finance roadmaps at the national level - those would build on the Nationally Determined Contributions (NDCs) and turn them into clear policy signals to be sent to financiers (low carbon investment pipelines)
                    2. targeting public effort where market forces cannot reach - usually the vast majority of green and climate finance will originate from the private sector, but experience shows that this capital often will not flow unless also putting in place supporting public finance and policy frameworks, especially in developing countries where key financial markets might still be missing. Incentives such as feed in tariffs, relieving the tax burden, and/or green public procurement along with focused risk mitigation tools can help to overcome investor concerns with new (green) sectors/industries. The public sector can provide a strong signal by both (a) issuing green assets and (b) buying them, e.g. so they form a standard part of central bank balance sheets
                    3. encouraging a real convergence at the international level in terms of the "rules of the game" that shape financial markets (market standards, financial regulations).

                    Perhaps also Green Digital Finance (see our recent thread on the matter) is something Iraq can explore in this transition, given fintech's qualities of enabling low-cost financial inclusion, transparent transactions and links to big data.

                    • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
                      kmzz C4D Connoisseur

                      Thank you Mohammed, for placing this very good question to all of us.

                       

                      Please could our World Bank colleagues answer the following part:

                      "According to a post by the Solar GCC Alliance (Dec 2014), it seems, Dubai Supreme Energy Council (DSCE) signed an advisory service agreement with the World Bank in that same year to design a funding strategy for Dubai’s green investment program. Perhaps our members from World Bank can provide some inputs from this (or similar) experience."


                      >> @Alberto Arredondo, Barbara Ellen Bitondo, Emmanuel Malukutila, Gaurav D. Joshi, Harikumar Gadde, Helena Munir Freih Al-Naber, Johannes Heister, @Miguel Angel Jorge Paul Dolan, Philip E. Karp, Raul Ivan Alfaro Pelico, Dilshod B. Yusupov, , @Stephanie Rogers, Tamara Louise Palmer etc.

                        • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
                          wt48 C4D Expert

                          I really like and appreciate this platform, certainly due to its knowledge hub capabilities, but increasingly because of the discourse that is possible.  I definitely would like to hear from the individuals that Karin copied, specifically about what DUBAI is capable of doing regarding the 'design' of a funding strategy that can promote state actors working with private sector and private citizens...

                        • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
                          kmzz C4D Connoisseur

                          Just in the news: France pledges support to stabilize post-Islamic State Iraq (26 Aug 2017, Reuters) with a 430 million-euro ($513 million) loan this year  (2017) to support the Iraqi public budget. "The loan, like those of the World Bank, requires an improvement in Iraq’s management of its public finances and the governance of state-owned enterprises, as well as greater energy efficiency, the news agency [AFP] said."

                          (Note: The original post was on Agence France Presse (AFP) but cannot be found anymore on their website.)

                          • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
                            jordon C4D Master

                            Is it at all polite to suggest that there is a domestic decision that intends strategic retention that might be critical to market share, the total industrial value under discussion is substantial, please note that this is an invitation for response and is not contextually grounded in the thread. More than anything I'm here to learn.

                            • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
                              kmzz C4D Connoisseur

                              A great post on our "sister" network "Green Finance Professionals" on LinkedIn. Check it out,Mohammed Yousif Ahmed and other interested members   (any thoughts from your side regarding Maurice Dixon's inputs?)

                              Maurice Dixon Some thoughts. How is the revenue from the current export of fossil fuels critical to national investment and national cash reserves in Iraq, and how would this be impact or replaced if Iraq shifted to a non-fossil fuel footing? Would Iraq shift itself off fossil fuels whilst still exporting oil and gas to fund the transition? Which parts of its current fossil fuel usage would it prioritise in a staged transition to a green energy footing, as some fossil fuel uses are easier to transition away from than others? What incentives would need to be put in place to encourage the oil and gas sector to be part of the solution and not be the drag anchor or barrier in the transition?

                                • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
                                  jordon C4D Master

                                  I wrote a rather complicated email to Cathy Pattillo on this very subject as it would concern Africa and the Middle East as well as other OPEC countries.

                                  It was interesting... I recommended near term QE to ameliorate an already difficult situation with price stability and well being, I have limited ancillary assumptions about these places as I am unfamiliar. Prevention is as has been demonstrated, far more of an economic efficiency than the limited gain in defense value. Margot Wallstrom has been a purveyor of spirited support for Prevention, specifically Palestine. 

                                • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
                                  jordon C4D Master

                                  The following is excerpt from an e-mail I wrote to Kate Gordon, it may be somewhat sensitive however domestic plebiscite or res publica intention is considerable actuation.

                                   

                                  .....

                                   

                                  Estoppel that is a denationalized reflection of Iraq war contingency to Kyoto is held to the international advantage that execution of a fundamental recognition of natural systems and constitutional equanimity do not exist, indemnifies initiative and entry.   

                                   

                                  Deployment as it pertains displacement and entry with respect to carbon is a departure from other resource type as a function of effect.  With biomass, inventory and natural systems stability are reconciled as total economy becomes the responsibility of disposition that generates hierarchy as a function of optimums. Access to supply chain inventory for planning is not a profit consideration in every case, where entry is the aspect of system efficiency as a whole, signal and data are not a jurisdictional value that ascribes to isolated profit oriented deployment. 

                                  • Re: How can Iraq shift from dependence on fossil fuels to green financing ?
                                    jordon C4D Master

                                    In the automation of group symmetry that assigns itself to justification of quantity (carbon) we encounter negative identity that assumes hard power as the ultimate control system, I have become fascinated with verifying the premise of associative life as both human and teleologically assertive as a premise inherent in nature.

                                     

                                    Air as a physical symmetry predates cognition and is essentially moral.

                                    Humans know air as a latent expectation of aerobic immediacy could be a connection with high potential physical properties.

                                     

                                    The physical symmetry of morality in nature is associative and direct, in reference to negatives we often find the permeation of negative premise, as a retention of good faith and levity, we retain yet negate as an extremity of spatial transduction.

                                     

                                    Life controls all value as a rationalization of margin and control system is appropriate for cognitive recognition of any reality at all. Existential exteriority induced by observation is in some cases negative. Negation as an inverse rationalization of efficiency is a scaled opportunity to allocate worth where cultural ideas limit entry.