The Paris Agreement calls on signatory countries to work towards low-carbon energy to achieve the mitigation targets in their Nationally Determined Contributions (NDCs). To facilitate this process, IHS Markit proposed a Competitive Low-Carbon Challenge (CLCC), in which participating countries would increasingly utilize private sector capital to scale up low-carbon energy solutions.
To start, the Capstone team provided an analysis of the barriers and opportunities for the private sector to invest in renewable energies and energy efficiency programs in Vietnam and China. These two countries offer lessons that can be extrapolated to other countries pursuing sustainable economic development due to the shared features of rapid economic growth, growing populations, dependence on fossil fuels, and increasing concern about environmental issues. China is already a leader in global investment in renewable energy. In addition, Vietnam is currently undergoing regulatory reform, making it increasingly desirable for private investment.
After completing their analysis, the team recommended specific profitable opportunities and risk mitigation strategies. They developed a Net Present Value (NPV) model for a typical 40 MW wind farm for each country, using appropriate and realistic assumptions. The team concluded that profitable low-carbon energy opportunities exist for both countries. Lastly, the team concluded their report by recommending other similar investments in emerging economies.