“Joe Biden’s Landmark Climate Law Tackles Energy Inequality

As President Biden signs the landmark climate law, the focus turns to ways to address climate change and how funding for clean energy will be channeled. According to a new study, poorer areas are likely to be the main recipients of the clean energy funds. The study published in the journal Nature, analyzed location-disaggregated data of the world’s earliest and largest clean energy financing programs. It found out that the majority of the funds are being channeled towards poorer areas. This indicates that Biden’s newly passed climate law has a good chance of levelling the playing field, as it provides investment and funding to disadvantaged communities, that typically lack access to capital for clean energy projects. The study’s results revealed that poorer areas around the globe account for a whopping 68 percent of both public and private clean energy investment. The authors of the study, Michael O’Sullivan of Stanford University and Julie Ni of the World Bank, stated that this result “contradicts popular notions that electricity finance is disproportionately biased towards richer countries and wealthier areas”. The study also found that the poorer countries that were the most reliant on financing through public means were India, China, Indonesia and Brazil. However, other research has found that evidence of how climate friendly investments are being distributed in poorer countries globally are still incomplete. Most venture capital funding is still concentrated in richer countries such as the United States. Therefore, this new climate law has the potential to really re-shape how funding for clean energy projects are distributed on a global scale. Overall, this new climate law is a great step forward in investing heavily in clean energy projects in poor countries, which have typically been overlooked in past investments. This new law provides the opportunity to move the needle in the fight against climate change.