Scaling up private investment in low-carbon energy systems through regional cooperation: Effective trade policy measures

Abstract

How to ensure energy supply and reduce environment pollution have turned into governments’ top priorities and key factors to maintain sustainable development. In this context, two major trade and investment agreements that could lead to profound influence on low-carbon energy systems development around the Asia-Pacific region are the Regional comprehensive economic partnership (RCEP) consisted of the Association of Southeast Asian Nations (ASEAN) plus Australia, China, India, Japan, New Zealand, and Republic of Korea and the Belt and road initiative (BRI) initiated by China. In order to have a smooth transition to low-carbon energy systems in Asia, besides RCEP and BRI it is imperative to boost private sector investment. Success of encouraging private sector investment depends on appropriate government policies towards promoting innovations and reducing financial risks to private investors. The research questions that are examined in this study are: What type of policy measures affects trade in low-carbon transition, particularly renewable energy (RE) transition? How can investment signals and incentives be reframed to scale up private finance in RE? The objective is to investigate and to provide several feasible trade policy and investment policy tools for both national and regional markets that governments could adopt to accelerate the speed of private financing of the low-carbon energy industry, particularly the RE industry.