Abstract
How do we go about stimulating faster energy transitions with increased low carbon investments – multiples of current levels – with an accessible multi-tiered financing structure that meets the world’s shifting energy needs over the next 10 years? Hydrogen is a clear transitions fuel.
Assumptions and stylized facts (see selected bibliographic references)
- HUGE financing needs to make energy transition and bend our carbon curve, 3 to 4 times current levels. Trillions more long-term investments per year in -- particularly electrical grids and hydrogen -- by private sector, governments, investors, and companies.
- Faster and more disruptive climate / weather changes will push the average 20 C temperature envelope with disproportionate geographic impact, unsettling surprises (floods, droughts, fires), and crises that will destabilize many countries.
- Continued volatility in oil & gas prices ($50-100/barrel) creating more uncertainty of the economics of sustainable low-carbon investments. Where scenario trajectories show fifty percent variance in electricity demand with changing weights of key drivers
- Agent differences, divergent investment choices, and heterogeneity among key players with different agendas, capacities, and priorities. Some will invest more with longer horizons and lower costs; others will delay.
Information asymmetries and rent seeking, the tragedy of the commons is ever present as temperatures climb with the sluggish pace of the energy transition. Investment decisions and uncoordinated policy will confound governments, companies, and people across the planet.
our Energy transition where MOBILIZING finance is essential to bending our carbon curve to the Paris COP Goals by 2035. We need to design a flexible financing structure that is focused on energy. These are not new ideas, however the urgency of stimulating much larger energy investments and providing more money cannot wait.
Given the pressure for faster transitions the focus of this initiative is on MONEY and redesigning a flexible financing structure that is attuned to the shifting needs of dissimilar markets and players. Redirecting our world economies from carbon intensive fossil fuels takes a lot of time and money. However, disruptive climate events and lack of funds calls for new initiatives. We cannot wait for the right market incentives, well thought-out policies, or proven technologies to guide us smoothly towards a low-carbon sustainable trajectory.
We need an energy bank that is built around energy sources and regions. A financing structure that recognizes our differences.
The big picture challenges are daunting so the focus on this effort is how we build an energy financing bank that brings Hydrogen to the market quickly. The hydrogen opportunities, technology initiatives, partners, cost estimates, and policy issues have been identified. Now how do we make things happen over the next five plus years? How do we marshal the moneys, the investment partners, and policy initiatives in varying markets to build a robust supply chains and competitive low-carbon energy source. Much like the growth of LNG developing a new, efficient, more sustainable fuel source takes huge investments across many markets / supply chains to build an economic alternative to our fossil fuel carbon economy.
Energy finance must be informed, flexible, and heterogeneous to be successful.