The United Nations Foundation (UN Foundation) announced today a major round of grant making totaling $29 million to support UN efforts around the world. An additional $13 million has been awarded since January 2002, bringing the total to $43 million to-date this year. $4.35 million was awarded to support sustainable energy and climate change initiatives in China including grants that will create China’s first clean energy venture capital facility, support the Kyoto Protocol and establish cost effective energy conservation programs.
“I am pleased to announce this latest round of grants that will go to help China combat global warming through energy efficiency initiatives. They represent the continuing efforts of the UN Foundation to bring together the UN with governments, NGOs and others who want to solve or prevent the most pressing global problems,” said Timothy E. Wirth, President of the UN Foundation.
Establishing a Climate-Friendly Technology Financing Facility in China
The primary barrier to energy efficiency and renewable energy projects in China is lack of access to financing. Although the technology exists through large multinational corporations, rural communities in China are too hard to reach without local vendors. Potential local vendors are not able to start businesses because banks are reluctant to provide financing to this sector and to people with little or no credit. The goal of this grant is to alter this dynamic by creating the first venture capital fund in China dedicated to financing clean energy enterprises. This facility, called the Climate-Friendly Technology Financing Facility, will provide seed capital and technical assistance to emerging Chinese enterprises.
The grant aims to leverage a minimum of $50 million from Chinese and international investors, the first major equity investment in emerging clean energy enterprises in China. The other goals of this project are to:
· significantly reduce China’s carbon emissions.
· decrease poverty by providing job opportunities and clean energy services to the poor.
· reduce emissions of damaging local pollutants.
· address the financial barriers that prevent sustainable energy use.
The project will be implemented by the United Nations Industrial Development Organization (UNIDO) with the assistance of a private sector fund management team.
“While the implications of climate change issues and the necessity of a global strategy to address them are widely appreciated, many developing countries are still in need of effective tools for their implementation. With its unique and creative approach in addressing these important issues, the UNF clean energy programme for China will provide a sustainable market mechanism for broad empowerment and thus have a significant impact,” said Liang Dan, UN Foundation board member and Director of the Investment and Technology Promotion Branch of the United Nations Industrial Development Organization (UNIDO).
Building Capacity for the Clean Development Mechanism in China
This grant seeks to promote the use of the Kyoto Protocol’s Clean Development Mechanism as a means to develop and implement clean energy projects in China. The Clean Development Mechanism is designed to encourage the reduction of greenhouse gas emissions through the trading of “emissions credits.” This opens up opportunities in developing countries to benefit from establishing the capacity of industry and government institutions to effectively develop and implement clean energy projects that are likely to be eligible under the Clean Development Mechanism. This grant seeks to support such efforts in China, the largest greenhouse gas emitter in the developing world.
This grant will fund a comprehensive capacity-building program that will help Chinese industry, financial institutions, and government institutions to develop and implement CDM projects. Three pilot projects in the areas of energy efficiency, renewable energy, and coal bed methane will be developed to provide case studies for future training activities and to enhance understanding of implementation issues. The information that is collected will be disseminated via a project website and database.
Promoting Energy Efficiency Standards – Collaborating Labeling and Appliance Standards Program (CLASP)
An analysis funded by the UN Foundation found that energy efficiency standards and labeling are among the most cost-effective aspects of consumer focused energy conservation policy. Collaborating Labeling and Appliance Standards (CLASP) is an energy efficiency initiative that will be implemented in three countries – Brazil, India and China –to promote energy efficiency through the provision of technical assistance for the planning and implementation of minimum energy performance standards and energy labeling programs for appliances, lighting, and motors.
The project will be implemented by UNDESA, in partnership with three U.S.-based NGOs – the Alliance to Save Energy, International Institute for Energy Conservation, and Lawrence Berkeley National Laboratory. The project enjoys strong support from the Chinese government.
Background on Chinese Fossil Fuel Consumption
Few countries in the world depend on coal as heavily as China. Coal accounts for 75 percent of primary energy consumption in China, making China the second largest carbon emitter in the world after the United States, and resulting in urban air pollution responsible for nearly 400,000 premature deaths each year.
China’s small and medium enterprises account for 60 percent of the country’s industrial output, although opportunities exist to significantly increase the energy efficiency of these enterprises by using low-cost, commercially available clean energy technologies. The primary reason that renewable energy and energy efficiency technologies have not yet been deployed on a large scale is a lack of access to financing.
The UN Foundation works with the UN, governments, NGOs, and the private sector to develop and implement sustainable, clean energy solutions to address global climate change. Focusing on three major greenhouse gas emitting developing countries – China, India, and Brazil – the UN Foundation’s Climate Change/Sustainable Energy Program has three priority areas: market-oriented, community-based renewable energy services; energy efficiency in the industrial, residential and commercial sectors; and promoting the Clean Development Mechanism, a provision of the Kyoto Protocol designed to lower the cost of reducing greenhouse gas emissions.
The United Nations Foundation was created in 1998 with businessman and philanthropist R.E. Turner’s historic gift to support UN causes. The United Nations Foundation promotes a more peaceful, prosperous, and just world through the support of the United Nations and its Charter. Through its grantmaking and by building new and innovative public-private partnerships, the United Nations Foundation acts to meet the most pressing health, humanitarian, socioeconomic, and environmental challenges of the 21st century.