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Statement Before The U.S. House Of Representatives Financial Services Subcommittee on Domestic and International Policy, Trade, and Technology: Hearing on Examining the Administration's Proposal to Establish a Multilateral Clean Technology Fund
Thank you Chairman Gutierrez, Congressman Paul and distinguished members of the subcommittee for inviting me to participate in today’s hearing.
I would like to begin with a brief tale of two possible clean technology funds, whose different consequences will have enormous implications for our children and grandchildren. Imagine, if you will, that it is now 2015, seven years after the creation of a multilateral fund for clean technology. In Scenario 1, the World Bank’s Clean Technology Fund (CTF) has provided developing countries with billions of dollars to make coal-fired power plants and other energy projects marginally more efficient but has done little to stem the alarming rise in greenhouse gas (GHG) emissions. The catastrophic nature of rapid climate change, including droughts, floods, fires, falling agricultural productivity, and a swelling tide of climate refugees, is increasingly evident and universally understood. But precious time has been lost. We are on course for a planetary disaster.
In Scenario 2, the U.S. Congress, led by the decisions of this committee, has insisted that the World Bank use the Clean Technology Fund to catalyze deployment of climate-friendly renewable energy on a very large scale. Private companies competing for billions of dollars in World Bank-funded contracts have rapidly driven down the cost of zero-carbon electricity. Renewable energy options such as solar thermal power are now cheaper than coal and other fossil fuels and provide a growing share of base load power around the world. Seven years later, we are on course for a major success in the struggle against climate change.
Both scenarios are utterly plausible. The decisions that this committee makes will determine which path we follow. Do we collectively have the strategic vision to seize this enormous opportunity? If we fail, future generations—including our own grandchildren—will surely ask: “Why didn’t they do something more?”
U.S. leadership in the creation of a multilateral Clean Technology Fund is laudable, and indeed essential in the global effort to prevent rapid, catastrophic climate change. But a badly-designed fund will be worse than no fund at all, because it will dissipate scarce resources while making it more difficult to set up an effective alternative. The World Bank has the technical staff to produce a well-designed CTF proposal if the U.S. Congress makes it clear that the American people expect this in exchange for their contribution. However, if the World Bank’s management is unable to comply in a timely fashion, then the U.S. should look elsewhere for a more qualified organization to administer this multibillion dollar fund.
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