Swiss Re AG · SIX:SREN
Swiss Re — International Institute for Sustainable Development — Investor Presentation (August 2023)
22 slides from Swiss Re's investor presentation, Aug 31, 2023
Slide 1: Financing a Just Energy Transition: Subsidies, Fiscal Supports and Incentives
Financing a Just Energy Transition: Subsidies, Fiscal Supports and Incentives 31 August 2023 | Philip Gass
Slide 2: International Commitments on subsidies and finance
International Commitments on subsidies and finance 2009: G20 committed “to phas[ing] out and rationaliz[ing] over the medium term inefficient fossil fuel subsidies” 2015: Paris Agreement pledged to make “finance flows consistent with a pathway toward low GHG emissions and climate- resilient developm
Slide 3: Status of G20 finance and subsidies
Status of G20 finance and subsidies
Slide 4: Key Messages: G20 fossil fuel subsidies
KEY MESSAGES Fossil fuel subsidies from G20 countries in 2022 amounted to at least USD 1 trillion • More than four times the annual average in the previous decade • Driven by vast consumption subsidies implemented in response to energy price crisis related to invasion of Ukraine • Not an efficient w
Slide 5: Investments in fossil fuel infrastructure by SOEs
Investments in fossil fuel infrastructure by SOEs USD 322 billion in 2022 Above pre-pandemic and pre-energy crisis levels Down payment on new fossil production Higher planned capital investment on upstream activities from 2023 At odds with climate science • IEA declared in 2021 that there could be “
Slide 6: International Public Finance for Energy
International Public Finance for Energy • FF PF Averaged USD 50 billion/yr from 2019 to 2021 • Nearly 4x greater than support to clean energy over same period (USD 13 billion/yr) o clean energy finance increased only USD 2 billion since last 3- year period • Locks countries further into reliance on
Slide 7: G20 Subsidies for Renewable Energy
G20 Subsidies for Renewable Energy • Announced USD 265 billion in subsidies for renewable power generation between Q1 2020 and Q2 2023 • Commitments - not spending! • Dwarfed by subsidies for fossil fuels (over USD 1.4 trillion over same period) • Shift public financial support from fossil fuels to
Slide 8: Global investment in renewables reached a record high
Global investment in renewables reached a record high of USD 500 billion in 2022 • 83% of global investments in renewable energy occurred in G20 – • 31% of which was from the public sector • Still only around half of investment in fossil fuels (USD 950 billion) • Investment needs to increase 3x to b
Slide 9: Mapping India's energy investment approach: Unlocking clean energy finance
Mapping India’s energy investment approach: Unlocking clean energy finance
Slide 10: Government support for energy at least INR 5 lakh crore
Government support for energy is estimated to be at least INR 5 lakh crore (USD 68 billion) in FY 22 • Growing support for renewable energy (RE) but needs to increase to align with the 2030/2070 targets • Oil and gas (O&G) subsidies fell, but fuel tax cuts shielded consumers from soaring oil prices
Slide 11: Energy Subsidies: Key Messages
KEY MESSAGES Energy Subsidies 1. Total energy subsidies have fallen since 2014; they fell a further 3% in FY 22. 2. Post-COVID-19 recovery evident in higher uptake of RE and EV subsidies. 3. Fossil fuel subsidies remain four times higher than clean energy (RE and EVs) in FY 22. 4. O&G subsidies fell
Slide 12: Public sector financing needs to increase to crowd in private investment
INDIA’S INVESTMENT NEEDS Public sector financing needs to increase to crowd in private investments in clean energy 1. India needs INR 2.1 lakh crore (USD 28 billion) per year in Source: BNEF (2022); IEEFA (2022) investments to meet 2030 RE targets • Double current levels. 2. To date, multilateral cl
Slide 13: Lending by Domestic PFIs
Lending by Domestic PFIs Source: BNEF (2022). Financing India’s 2030 Renewables Ambition. Note: Includes annual disbursals by top three state-owned power financiers—namely PFC, REC and IREDA.
Slide 14: Indonesia & the ADB region: Fossil fuel subsidies
Indonesia & the ADB region: Fossil fuel subsidies encourage wasteful consumption of fossil fuels with wide-ranging impacts, including hindering clean energy investment
Slide 15: Indonesia
Indonesia • Incentives for renewable energy are undermined by the support given to fossil fuels • Support for biodiesel from the Crude Palm Oil (CPO) export levy accounted for the majority of subsidies for biofuels • Since both the EV and EV battery industries are emerging sectors, most of the ident
Slide 16: Indonesia
Indonesia • Support for fossil fuels and fossil fuel electricity electricity remains substantially higher than support for renewable energy • Support for oil and gas has fluctuated significantly • Support for coal has risen considerably
Slide 17: Fossil Fuel Subsidies in ADB Region
Fossil Fuel Subsidies in ADB Region Key Highlights • Asian Development Bank (ADB) regional members provided at least $119 billion in fossil fuel subsidies in 2021, and subsidies will likely be significantly higher when data are available for 2022. • ADB regional members have committed to reform foss
Slide 18: Fossil Fuel Subsidies in ADB Region
Fossil Fuel Subsidies in ADB Region FFSR is needed to unlock clean energy finance Internationally Governments can take action by: • Increasing ambition and accountability in agreements for FF energy • Improving reporting on FFS under SDG 12.c.1 • Expanding & strengthening commitments in new fora Nat
Slide 19: JETPs as a model for clean energy investment in major economies
JETPs as a model for clean energy investment in major economies
Slide 20: Just Energy Transition Partnerships
Just Energy Transition Partnerships A new model for FF to renewable energy transition • JETPs are a financing cooperation mechanism, looking to assist a selection of coal- dependent emerging economies make a just energy transition. • The goal is to support these countries' self-defined pathways from
Slide 21: Ensuring JETP can deliver on their promise
Ensuring JETP can deliver on their promise Recommendations • Avoid the coal to gas transition & avoid locking in long-life gas infrastructure • Focus on considerable solar and wind potential • JETP can be a public finance signal and driver to the investment community for renwable energy transition i
Slide 22: Thank You!
Philip Gass Thank You! iisd.org/energy Twitter:@IISD_Energy Email: [email protected] Shruti Sharma Siddharth Goel Anissa Suharsono Martha Maulida [email protected] (IN) [email protected] (IN) [email protected] (ID) [email protected] (ID)
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