Turning Article 6 Into Renewable Energy Investment
Article 6, energy finance and the missed opportunities. A response to the Center for Global Development Note “Will UN Carbon Credits Finance Energy for Development?”
The CGD Note makes a useful sizing argument but never shows the mechanism by which Article 6 finance becomes energy investment. That gap matters, because the mechanism is where the market will be won or lost in the next five years.
The Note, by Philip Mann and Jonathan Beynon, argues three things. ITMO revenues in the 2030s could reach tens of billions of dollars a year. That is comparable to the cost of universal electricity access (about $15 billion a year) and clean cooking (about $8 billion a year). And because these flows behave like exports, not aid, they will favour middle-income countries, so aid budgets should concentrate on the poorest.
We agree with the direction of travel and with much of the host-country governance advice. But the Note is, unfortunately, just a donor-policy synthesis, not a market analysis. It contains no ITMO transaction, no observed price, no project and no host-buyer pair. Its comparison of results-based revenue with upfront capital needs is not like for like.
The Article 6 Network sees six missed opportunities... Order this Policy Paper below >>
