Today’s post, by Mary Robinson, President, Mary Robinson Foundation – Climate Justice and member of the Sustainable Energy for All Advisory Board, is one in a series of ‘In my view’ pieces written by prominent authors on issues covered in the “Development Co-operation Report 2015: Making Partnerships Effective Coalitions for Action”
Work to provide access to sustainable energy for all lies at the intersection of development, human rights and climate change: the building blocks of a climate justice approach.
The focus on sustainable energy, in particular renewables, is fundamental for the transition to a carbon-neutral world – an essential path to avoid dangerous climate change. The focus on ALL, on universal access, recognises that access to sustainable energy is both a driver of development and an enabler of human rights, from the right to health to the right to food.
The report of the High-Level Panel on the Post-2015 Development Agenda and the discussions of the Open Working Group on Sustainable Development Goals highlight the need for the international community to commit to leaving no one behind. In this sense, there is no one-size-fits-all approach to ensuring universal access to sustainable energy; it will require a continuum of approaches, from market-based ones to those supported by the public sector.
This is no surprise to development practitioners, who know the importance of specialised approaches for reaching the poorest and most marginalised communities. Social protection, including social safety nets, prevent chronic food insecurity and enhance health and education outcomes by targeting public resources to those most in need (an important theme in the OECD Development Co-operation Report 2013: Ending Poverty).
Targeted approaches are also fundamental to ensuring that the transition to a sustainable, zero-carbon world is fair and inclusive (Mary Robinson Foundation – Climate Justice, 2013). Market-based solutions will deliver sustainable energy services to the majority, but the majority is not our goal; the goal is ALL. Targeted solutions, based on social protection for example, will help ensure that the extreme poor, women, marginalised communities, displaced people and refugees reap the benefits of the transition to clean, renewable energy.
The Sustainable Energy for All initiative encourages governments, businesses and civil society to work in partnership to make universal access to sustainable energy a reality by 2030. The United Nations General Assembly unanimously declared the decade 2014-24 as the United Nations Decade of Sustainable Energy for All, underscoring the importance of energy issues for sustainable development and for the elaboration of the post-2015 development agenda.
Women are a fundamental part of the ALL. When enabled to realise their rights, women will be the entrepreneurs, technicians and primary users of sustainable energy. But all too often women are not included in decision making on energy supply and access, despite the fact that their energy needs are different than those of men. Women prioritise energy for schools, health centres and productive uses over men’s preference for enterprise-based activities (Mary Robinson Foundation – Climate Justice, 2012). This is the reason behind the decision to focus the first two years of the decade of Sustainable Energy for All on women, energy, children and health. This focus presents a real opportunity to place women and gender equality at the heart of all activities – national and international – that contribute to fulfilling the goals of the initiative.
Sustainable Energy for All gives us the opportunity to deliver climate action, enable development, protect human rights, and galvanise the resources and political leadership needed to make universal access to sustainable energy a reality. To do so effectively, actors at all levels need to understand the needs of people on the ground, taking into account their circumstances and their ability to access technologies, knowledge and financing. This understanding must inform the design of all energy service delivery.
The goals of this initiative will only become a reality by ensuring the right to participation, so that people’s voices are heard and access to sustainable energy does, indeed, reach ALL.
Most of us would agree that clean energy is a worthwhile goal, and the world has invested more than $2 trillion on renewable-energy plants in the past decade. In 2014, energy generators added more renewable capacity than even before. But are we doing enough? According to the IEA, cumulative investment in low-carbon energy supply and energy efficiency will need to reach $53 trillion by 2035 to keep global warming to 2°C. It sounds a lot, and it is, but it’s only 10% more than the $48 trillion that would likely need to be invested in any case in the energy sector if the economy continues to expand and demand for power continues to grow as it has been doing in recent decades.
And the price difference with other types of energy is shrinking. Clean energy, especially electricity generation from renewable-energy sources, is increasingly competitive with new-built conventional power plants. It could therefore play a significant role in the transition to a low-carbon economy and help to meet broader economic and development goals. For example, the fact that electricity generation from renewables such as wind or solar power can exploit small distributed systems makes this form of energy suitable for areas not served by the large, centralised grids of traditional systems.
However, the deployment of low-carbon technologies is heavily influenced by government support, in particular in the solar- and wind-energy sectors. In the past decade, governments have provided substantial support to clean energy that has benefited both domestic and international investment. Globally, public support to clean energy amounted to $121 billion in 2013. At least 138 countries had implemented clean-energy support policies as of early 2014. Incentive schemes have contributed to enhancing clean energy investment worldwide, even if clean energy investment had to coexist with disincentives to investing in the sector, for example fossil-fuel subsidies, and the difficulties inherent in shifting away from fossil-fuels in the electricity sector, given the massive investments already made in traditional generation and the way electricity markets function.
Largely driven by government incentives, new investment in clean energy increased six-fold between 2004 and 2011, reaching $279 billion in 2011, before declining in 2012-13. Solar and wind energy have received the largest share of new investment – $114 billion and $80 billion respectively in 2013.
Prices of the equipment needed to generate clean energy, such as wind turbines and solar panels, have been falling, in part thanks to international trade and investment helping the solar photovoltaic (PV) and wind energy sectors to become more competitive. However, since the 2008 financial crisis, the perceived potential of the clean energy sector to act as a lever for growth and employment has led several OECD countries and emerging economies to design green industrial policies aimed at protecting domestic manufacturers, notably through local-content requirements (LCRs).
Local-content requirements typically require solar or wind power developers to source a specific share of jobs, components or costs locally to be eligible for policy support or public tenders. A new OECD report on Overcoming Barriers to International Investment in Clean Energy shows that as of September 2014, such requirements have been designed or implemented by at least 21 countries, including 16 OECD and emerging economies, mostly since 2009.
New, empirical evidence presented in the report shows that LCRs have hindered global international investment flows in solar PV and wind energy, reducing the potential benefits from international trade and investment mentioned above. This might be related to the fact that such policies increase the cost of intermediate inputs (the components needed to build the final products). This could lead to less competition in downstream segments of the value chain such as installation. Downstream activities are associated with more value creation than midstream manufacturing activities or upstream raw materials production and processing. The estimated detrimental effect of LCRs is slightly stronger when both domestic and international investments are considered. This indicates that LCRs do not have positive impacts on domestic investment flows.
In addition, according to results from a 2014 OECD Investor Survey of leading global manufacturers, project developers, and financiers in the solar-PV and wind-energy sectors on “Achieving a Level Playing Field for International Investment in Clean Energy”, LCRs stood out as the main policy impediment for international investors in solar PV and wind energy. It’s not surprising that a majority of international investors involved in downstream activities of the solar and wind-energy sectors selected LCRs as an impediment. More unexpectedly, a majority of international investors involved in upstream or midstream activities also identified LCRs as an impediment. This result suggests that LCRs can hinder international investment across the value chains.
As demonstrated in the OECD report, evidence-based analysis is needed to help policy makers design efficient clean-energy policies. Policy makers should reconsider measures in favour of domestic manufacturers for enhancing job and value creation in the clean energy sector if, as the OECD study suggests, the overall result is less investment and probably fewer opportunities for the very sector protectionism is supposed to help. Co-operation at a multilateral level is needed to address barriers to international trade and investment in clean energy.
That statistic was quoted during this afternoon’s session on energy by IEA chief economist Fatih Birol in support of his argument that even without climate change, there is a strong case for renewable and alternative energies. Birol was replying to Cecilia Tortajada, Vice-President, Third World Centre for Water Management, who asked if it was time for a change of discourse, given the criticisms of climate change science recently.
Birol also vigorously rejected the criticisms, saying that practically every scientist in the world working on the issue accepted that there was an anthropogenic element in present climate trends. Session moderator Peter Kemp Editorial Director of UK based Energy Intelligence, agreed, saying the attacks on the science were politically motivated.
Birol’s main point was that in developing countries, it would take too long and cost too much to link up the 1.5 billion people who don’t have access to mains power. Alternatives such as solar could transform people’s lives.
He pointed out something that we discuss in Chapter 3 of the Insights book on sustainable development: electricity means your day lasts longer, and brings numerous development benefits, ranging from making it easier for kids to do their homework and business to work later to reducing air pollution and the eye and respiratory diseases it causes.
Alternatives and renewables have potential benefits in developed countries too, improving energy security and providing a substitute for the inevitable day when the oil runs out.
They’re not the only option though. The panellists seemed to agree that nuclear would play an important role in the future energy mix, but so would better energy efficiency.
There was optimism and pessimism regarding how the situation had changed since last year’s Forum.
On the downside, Copenhagen failed to live up to its promise; a global gas glut means that renewables are less attractive; and strong demand for renewables relies on strong expansion in demand – and that’s not happening because of the recession.
On the bright side, prices of photovoltaics have dropped significantly; second generation biofuels are gaining momentum; and many stimulus packages include a green growth element.