Central American states are aware of the implications of the climate change challenge and are attempting to combat it through the use of the abundant renewable resources of the region for energy generation and fossil fuels substitution. At the international level, the markets for greenhouse gas emission reductions and renewable electricity certificates have been fragmented. This picture is changing but a great deal of knowledge is required from the project developers to maximise the carbon benefits for their projects.

In 2015, global investment in renewables grew about 5 percent relative to the previous year and reached an all-time high of US$ 286 billion (bn). And there are more interesting trends: Investment in renewables’ based electricity generation capacity in 2015 has been more than double the investment in the major fossil fuels (renewables: US$ 266 bn versus US$ 130 bn for coal and gas stations). This also leads to added capacity in terms of Gigawatts in 2015 in renewables (134 GW) outstripping all other technologies combined (conventional coal, gas, and nuclear).

This publication examines the sectors, technologies and policy measures that will be central in the transition to a low-carbon energy system. It addresses the following questions: (1) What are the roles of coal and gas in meeting the stringent decarbonisation requirements for the power sector consistent with IEA modelling of global climate goals? (2) What are moderate carbon prices accomplishing in the electricity sector, and how can they be helpful as part of a package of other policies?

This report provides the results of a review of the evidence that investments in electricity-generating capacity have benefits for poor people, and what factors influence that relationship. The review begins by elucidating a theory to break down the causal chain between additional renewable electricity generation capacity and poverty impacts in four stages or links, which can be formulated as four research questions: (1) What is the link between increased renewable electricity capacity and higher availability and reliability of supply?

This report highlights two underutilized but fully implementable technologies that efficiently integrate heat and electricity systems, provide flexibility and enhance energy security. It examines what restricts co‑generation and efficient district heating and cooling systems that can help de-carbonize the energy system.