CGD's David Wheeler Outlines Strategic Path for Clean Tech Fund in Congressional Testimony

The U.S. House of Representatives Financial Services Subcommittee on Domestic and International Policy, Trade, and Technology held a hearing yesterday afternoon to examine the Bush administration's proposal to establish a multilateral Clean Technology Fund. CGD senior fellow David Wheeler was among the panel of witnesses invited to testify on the U.S. commitment of $2 billion over three years and whether the World Bank is a suitable home for these scarce financial resources.We will soon be posting a more detailed summary of the hearing and issues discussed, but click here to view David's written testimony in the meantime. Here is a quick overview of his main recommendations:

I believe that Congress can help make the Clean Technology Fund a successful investment of taxpayer dollars by setting the following conditions for authorization.

1. Congress should not agree to provide American taxpayer support for the CTF as it is currently proposed. Instead, Congress should instruct the U.S. Treasury to inform World Bank management that U.S. support will only be forthcoming if the proposal is revised to ensure strategic use of the CTF to make zero-emissions renewable energy cost-competitive with energy from fossil fuels.
2. To do this, the CTF must focus on renewables that have the potential to be cost-competitive within a few years, and exclude projects that merely improve fossil-fuel combustion efficiency. In particular, the CTF should exclude all proposals for coal-fired power.
3. The revised proposal must include a commitment by the World Bank to adopt carbon accounting as rapidly as possible, certainly no later than within a year of CTF authorization and before any funds are actually disbursed. Without carbon accounting, the World Bank cannot select the most cost-effective projects, track progress on emissions reduction, or fulfill the Clean Technology Fund's mandate of helping developing countries bridge the gap between dirty and clean technology.