Best Ideas 2018 features all the nominated entries submitted to the Youth Citizen Entrepreneurship Competition under ‘Submit your Idea’ category. All the entries consist of innovative solution or proposition for an enterprise that champions the Sustainable Development Goals. They can be on the conceptual, planning, or start-up stage. If you want to know the 10 finalists in this category, click HERE
Share market model for funding sustainable energy projects
Explain your idea in details:
Despite awareness about the alarming effects that the release of greenhouse gases has on climate, shift to renewable energy sources is a very hesitant step for many due to the financial burden and the possible strain on economic development. This has prevented a few developed and developing nations from committing themselves to commitment periods of the Kyoto protocol even when they were listed among the top 10 emitters of CO2. Thus, the fact that financial burden prevents entities from adopting practices to tackle climate change stands highlighted. The main objective of this idea is to suggest a model for funding renewable energy projects that can make it easy for all entities, ranging from individual households to large industries, to make the shift to renewable energy projects with the least straining effect on its finances and development. This idea can thus remove the caution of financial strain tied with the adoption of practices to tackle climate change. The working of the model will contain the following activities, any entity wishing to shift to renewable energy source must submit a fund request to the share trading centre set up for the purpose of raising funds for such projects. The centre will issue a number of shares of varying value depending on the fund required for the proposed project. The share holder of these shares will be promised in return a fixed sum over an agreed period of time, which upon expiry would transfer the ownership of the project to the entity. These shares are non-negotiable thus making the value of the shares fixed. The innovative approach of this idea is the change of what is being traded to tackle climate change. It proposes to trade investments rather than emissions.
Expected impact of your idea on sustainable development
The model would be successful as long as the interests of both the shareholders and the entity declaring shares are served. Illustration: Average household consumption of electricity in Washington = 12,444KWh annually, Average electricity bill in Washington = $1056 p.a., Energy that can be produced in Washington by a 12KW solar energy system = 13,071KWh Average cost of 12 KWh solar energy system in Washington = $31,422 Assume, $31,422 is divided into six shares, each worth $5,237. Dividing the average electricity bill among the six shares, each share be paid a dividend of $176. The shareholders be paid over a period by which they realise the entire value of the share. This can give the shareholders an assurance of payback and the entity is prevented from bearing the financial burden at one go. They are just required to keep spending the same in the way of dividends. A limitation is that the payback period is long (It would take about 30 years for the $5,237 to be paid back as dividends of $176). However, if the investment is made in the light of a good cause to tackle climate change, it can motivate people to purchase shares. Further, the benefit is more than what one can realise from an average interest rate on deposits in banks. ($176 is 238% more than the interest that can be earned from depositing $5,237 in a bank in Washington at an interest rate for deposits at 1% p.a.,. This investment is clearly a gain for the shareholders in relation to depositing their funds in the bank).
Plans for implementation and sustainability
The business model is that of an intermediate role in the trading of shares. A percent of the investment amount to be broken down as shares will be charged as fee for the share trading centre to list and allocate shares. This model is bound to work as it follows the exact same model of a share market where a companys shares are traded to raise capital. The success of the latter supports the model proposed in terms of its feasibility. The financial source for the implementation of the idea will be raised from venture capitalists which can help in opening up new prospects like IPO for further financing needs and can also give the concern an access to a wide network of contacts and expertise. The ideas close inclination to the goals of the United Nations Framework Convention on climate change provides more reason for it to be worked on in a collaboration. The idea being in its conceptual stage will be better seasoned with the expertise and power that the UNFCC has gained since its inception. This aim of this idea, to create a model for raising funds for renewable energy projects, can equip entities with the slightest interest in tackling climate change with the power to take action. This can be done with the least strain being exerted on a national scale as the model is almost the same as the share market that already exists to trade a companys equity and the only requirement is for the share trading centre to be set up with regulations that can house in such a trading mechanism in every country.
Name : Sindhuja Sivalinga Rajan Age : 20 I've completed my Bachelors in Business Administration and will pursue Post Graduate Diploma in Management from 2018-20. I was a student of science until school but changed streams while getting into college and ever since then I've felt an inherent drive for Business. I aspire to frame strategies and models that can bring about solutions and the joy of charting a successful strategy or model that makes a valuable impact is what motivates me in business. I have maintained a consistent academic record over my entire schooling and my under graduation. I've been as an exchange student in Japan for over three months and it gave me an opportunity to interact with students from many countries. The experience was truly priceless as i got to hear about varied perspectives on various topics at discussion in class.