Zero: The Climate Race How the financial system can work for climate, not against it: Moving Money
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Apr 10, 2025 Avinash Persaud, climate advisor to the Inter-American Development Bank and former economic advisor to Barbados, dives into how the financial system can better support climate action. He discusses the staggering gap in clean-energy investments flowing to developing countries. Persaud highlights the risks capital owners face when investing in these regions, from currency issues to political instability. He also emphasizes the need for tailored electrification strategies while exploring the broader implications of reserve currency status on global finance and fossil fuel subsidies.
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Capital Costs Hinder Renewables
- High capital costs hinder renewable energy investment in developing countries, despite tax incentives.
- Renewables' capital-intensive nature necessitates access to affordable capital.
Investor Guarantees
- Developing countries often make significant concessions to attract investors, including legal agreements.
- They allow lawsuits in foreign courts for policy changes, unlike developed nations.
Electrification Drivers
- Electrification is driven by domestic fuel access rather than sector-specific abatement potential.
- Fossil fuel-rich countries electrify slower, lacking economic pressure for efficiency.