Climate Change and the Absence of an International Investment Organization

Abstract

The global needs for investment in clean energy are vast and can only be met if resources are pooled from different sources; public, private, and donor funds. This is especially true for capital intensive projects such as geothermal and hydropower. While government funds are important, many developing and emerging countries do not have the tax base to fund large, capital intensive, long term projects. International Financial Institutions such as the World Bank and the regional development banks could help capital mobilization for clean energy projects and facilitate cooperation with the private sector. One important obstacle in scaling up clean energy projects today is that no comprehensive multilateral agreement on foreign investments exists. Additionally, no multilateral institution is engaged in cross border investments in the same way as for cross border trade. No World Trade Organization exists for investment. This can be an obstacle for global efforts to promote cross border climate friendly investment and an impediment for private sector flows.