How to cut through the red tape impeding the energy transition
Generation Investment Management
Generation is a pure-play sustainable investment manager. It is all we do. It is all we will ever do.
As we strive to meet our climate goals, streamlining clean energy adoption is crucial. We need to focus on reducing bureaucratic hurdles and speeding up our transition to sustainable energy sources.
Excessive red tape can impede progress and efficiency in all walks of life, and the transition to sustainable energy sources is no exception.
Huge strides and global commitments are needed to limit global warming and time is running out, as we discuss in our latest Sustainability Trends Report.
While we have seen a wave of backsliding on climate commitments in the past couple of years, bureaucracy and red tape are a less high-profile hurdle we need to overcome. Some checks, balances and oversight are essential, but too many can breed inefficiencies, stymie innovation and push up costs.
Here are six ways we can strike the right balance and put us on a more efficient path towards our global goals:
1. Streamline permitting
Simplify and expedite approvals for renewable energy projects, reducing delays and costs. Implement fast-track ‘green lanes’ for clean technology initiatives. [1]
2. Harmonise regulations
Work with policymakers to create consistent standards across jurisdictions, simplifying compliance for clean energy companies.
3. Improve grid connectivity
Streamline the process for connecting renewable energy projects to the electrical grid, enabling faster integration of clean power sources. [2]
4. Enhance public-private collaboration
Foster partnerships between government agencies and the private sector to identify and remove regulatory bottlenecks [3].
5. Support innovative financing
New financial instruments can help accelerate clean energy investments [4]. The financing community needs to work together on creative structures like blending private investment with government incentives or community investment programmes to channel capital to clean energy projects.
6. Promote regulatory sandboxes
Create controlled environments where innovative clean energy solutions can be tested with reduced regulatory burden.
Creating a more conducive environment for clean energy investment and development should be a priority for all. Less red tape not only accelerates our transition but also encourages innovation and investment.
We believe it's time to say yes to clean energy and remove these barriers that have been holding us back.
Read more in the eighth edition of our Sustainability Trends Report, which looks in detail at the ongoing challenges the world faces in efforts to reduce emissions.