Description

Low-Carbon Business and Clean Energy Value Chains Parameter III assessed through three indicators the availability of local manufacturing and other similar types of capacity to spur clean energy deployment. These seek to take into account the availability of: local manufacturers to provide the equipment needed to construct projects, local financial firms to provide capital, and local service firms to provide assistance such as legal or other services. For lesser developed nations, this parameter uses the augmented off-grid focus methodology to take into account the availability of technical assistance and service providers in value chains specifically related to distributed clean energy. In all, Climatescope seeks to account for no less than 63 segments of these value chains. In the case of the least developed nations, a total of 78 value chain segments were assessed.

It is important to note that countries that score higher than others on Parameter III do not necessarily have more actual manufacturing capacity than others (though that is certainly possible). Rather, this parameter simply conducts a binary count of how many value chain segments are fulfilled in each country based whether there is at least one company active in each segment.

More than any other, scores on Parameter III do to a large extent correlate with country size as the largest nations with the biggest economies that have the most manufacturing and clean energy capacity in place overall.

Thus it is unsurprising that the largest nation assessed by Climatescope, China, also had the highest (and maximum) score. However, China’s ranking is also justified by the fact that the country today is, on a volume basis, unquestionably the top manufacturer of clean energy equipment worldwide. Brazil, the largest country in Latin America and the Caribbean, is also home to more manufacturing value chain segments in that region than any other and ranks 2nd worldwide. The country has implemented explicit local-content rules in recent years mandating that clean energy projects must use certain amounts of equipment manufactured within Brazil to qualify for low-rate financing from Brazil’s development bank. South Africa and India have seen growth in their value chains for somewhat similar reasons.