There has been an increasing focus inside and outside the World Bank Group (WBG) on supporting new technology development, transfer, and deployment in the energy sector. This has been a response to a number of longstanding and emerging challenges associated with current patterns of energy production and use.

This paper examines the opportunities and challenges for promoting clean energy technologies, and highlights options for the WBG in this area going forward. The definition of clean technology used here is taken from the Climate Investment Funds (CIF): a clean technology is one that reduces greenhouse gas (GHG) emissions; air, water, and soil pollution; and/or habitat degradation and destruction (see www.climateinvestmentfunds.org/cif/node/2). The focus is on new technologies those that have yet to achieve widespread commercial acceptance due to policy, cost, performance risk, or lack of familiarity. New technologies frequently, but not always, involve patents,and include technologies that have been available only in specific markets previously as well as products and services that are becoming available for the first time
anywhere. It is important to note that there is no sharp boundary between new and commercial technologies, but there existsWB a continuum of technologies with a range of technical and nontechnical factors that impede their widespread deployment.

The most prominent of the emerging challenges has been climate change. As the International Energy Agency (IEA) recently stated, “The most important message remains unchanged: current [energy use] trends… are patently unsustainable in relation to the environment, energy security and economic development. Ongoing dependence on fossil fuels (especially coal) continues to drive up … CO2 emissions…” (IEA 2010a). There is also concern about growing emissions of methane (CH4) and other greenhouse gases, as well as release of biomass and soil carbon from changes in land use and deforestation.2

At the same time, currently available alternative technologies with lower carbon-intensity are noteworthy for their shortcomings as large-scale substitutes for petroleum fuel and fossil fuelpowered electricity. Challenges relate to scalability, the time required for scale-up, energy density, substitutability into current infrastructure, availability of input resources such as water and rare earth minerals, and independence from fossil fuel inputs (Fridley 2010). The IEA has noted for several years that an energy revolution, based on widespread deployment of both existing and new technologies, is needed to cut GHG emissions by 50 per cent or more below current levels and keep atmospheric CO2 concentrations below 450 parts per million (ppm) (IEA 2010a). To overcome these challenges, sustained technological research, development,
demonstration and deployment are required.

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SOURCE: World Bank

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