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You are here: Home / Archives for Energy Markets

July 8, 2016

The Scale of the Energy Access Gap

By Benjamin M. Attia
Access to electricity is a key catalyst correlated with economic development.

The International Energy Agency (IEA) recently estimated that over 1.5 billion people do not have access to affordable electricity, representing one quarter of the world’s population [1]. In the absence of aggressive new policies and significant financing, it is estimated that that number will drop to only 1.3 billion by 2030 [1]. The United Nations’ (UN) Sustainable Energy for All (SE4ALL) initiative, which is working toward a goal of global universal energy access by 2030, estimates that approximately 600 million of these unelectrified people live in Sub-Saharan Africa [2]. This number is expected to rise to approximately 645 million by 2030 under a business-as-usual scenario due to expected explosive population growth [2, 3]. This widening gap of energy access is a complex and multidimensional problem and represents an important hindrance to economic development and social change in the developing world.

Historically, the access gap since the initial commercialization of electricity has “consistently been between 1 and 2 billion people… as grid expansion has roughly paced global population” growth [4]. This suggests that the access gap is a reflection of a persistent lack of equity in distribution. In fact, in 1983, Krugmann and Goldemberg famously estimated that at 1983 global consumption levels, the “energy cost of satisfying the basic human needs” of every person on the planet was well within the available supply of energy resources [5, p. 60].

Today, the consumption and distribution inequalities are even more pronounced. In 2011, the average American consumed 13,240 kilowatt hours (kWh) per person per year, while the average Ethiopian consumed only 56 kWh [6]. Further, across all of Sub-Saharan Africa, annual per capita kWh use is one-sixth the load requirements of a relatively efficient American refrigerator [7]. Globally, the poorest three-quarters of the world’s population comprise less than ten percent of total energy consumption [8, p. 5].

The inequities that underline energy poverty and energy access are also fundamentally connected to climate change. Looking ahead, the world’s demand for electricity is estimated to increase by more than 70% by 2040, and the World Bank and IEA estimate that a doubling in installed energy capacity will be necessary to meet the anticipated growing demands of emerging markets [9], [10]. Despite the accelerating paradigm shift to low-carbon and renewable energy generation technologies, there is a paradoxical irony to the link between development and climate change which has left the poorest countries with the lowest contributions to greenhouse gas (GHG) emissions as the most vulnerable and most susceptible to the effects of climate change [11, p. 591, 12]. As markets evolve to value avoided GHG emissions [13, p. 215], reconciling the joint–and possibly conflicting– goals of development through universal energy access and combating climate change will accelerate, but at present, the inequity in energy access is only further exacerbated by the parallel inequities with respect to climate change adaptation measures.

Many scholars agree that access to electricity in itself is not fully sufficient to bring about the required economic and social development to break the cycle of poverty [14, p. 1058, 15, p. 2194]. It has also been widely settled that access to electricity is a key catalyst correlated with economic development and that a lack of electricity access is a key bottleneck to growth [16], see [17] for comprehensive rebuttal]. However, approaches for tackling the problems associated with energy poverty are often difficult to scale up because of the difficulties associated with navigating this uneven technical, sociocultural, agricultural, and institutional landscape, and, as will be demonstrated below, the multidimensionality of energy access inhibits scalability of any one catch-all solution.

The IEA estimates that 30% of those without access to electricity would best be served by grid extension, 52.5% would be best served by micro-grids, and 17.5% would best be served by stand-alone energy systems [3, p. 14]. There is a clear need for investment in rural electrification initiatives at all three levels and a clear gap in understanding routes and sinks for effective impact investing [3, p. 14]. National grid extension programs and firms selling small energy systems are generally much better funded than the community-scale solution of micro-grids, despite their significant potential market share and niche ability to provide scale benefits, rapid deployment, flexibility of business models, and energy storage, security, and reliability [3, p. 15]. The micro-grid space is rife with opportunity to build markets, innovate new business models, develop new financing mechanisms, and provide the sustainable development benefits of renewable electrification and increased economic potential.

As one development professional put it, “If rural [people] have power in their lives, they will have more power over their lives” [16]. Access to electricity is not the answer to the greater global problems of poverty and inequity, but can be a good place to start.

References
[1] “World Energy Outlook 2014,” Paris, France, 2014.
[2] SE4ALL, “Energy for all: Financing Access for the poor,” in Energy for All Conference, 2011.
[3] M. Franz, N. Peterschmidt, M. Rohrer, and B. Kondev, “Mini-grid Policy Toolkit: Policy and Business Frameworks for Successful Mini-grid Roll-outs,” EUEI Partnership Dialogue Facility, Escheborn, 2014.
[4] P. Alstone, D. Gershenson, and D. M. Kammen, “Decentralized energy systems for clean electricity access,” Nat. Clim. Chang., vol. 5, no. 4, pp. 305–314, 2015.
[5] H. Krugmann and J. Goldemberg, “The energy cost of satisfying basic human needs,” Technol. Forecast. Soc. Change, vol. 24, no. 1, pp. 45–60, 1983.
[6] C. Kenny, “If Everyone Gets Electricity, Can the Planet Survive?,” The Atlantic, 2015.
[7] “Power Africa Annual Report,” 2014.
[8] J. Tomei and D. Gent, “Equity and the energy trilemma Delivering sustainable energy access in low-income communities,” International Institute for Environment & Development, London, United Kingdom, 2015.
[9] “World Energy Outlook 2015 Factsheet,” Paris, France, 2015.
[10] R. K. Akikur, R. Saidur, H. W. Ping, and K. R. Ullah, “Comparative study of stand-alone and hybrid solar energy systems suitable for off-grid rural electrification: A review,” Renew. Sustain. Energy Rev., vol. 27, pp. 738–752, 2013.
[11] A. Yadoo and H. Cruickshank, “The role for low carbon electrification technologies in poverty reduction and climate change strategies: A focus on renewable energy mini-grids with case studies in Nepal, Peru and Kenya,” Energy Policy, vol. 42, pp. 591–602, 2012.
[12] J. Byrne, Y.-D. Wang, H. Lee, and J. Kim, “An equity and sustainability-based policy response to global climate change,” Energy Policy, vol. 24, no. 4, pp. 335–343, 1998.
[13] U. Deichmann, C. Meisner, S. Murray, and D. Wheeler, “The economics of renewable energy expansion in rural Sub-Saharan Africa,” Energy Policy, vol. 39, no. 1, pp. 215–227, 2011.
[14 A. Bhide and C. R. Monroy, “Energy poverty: A special focus on energy poverty in India and renewable energy technologies,” Renew. Sustain. Energy Rev., vol. 15, no. 2, pp. 1057–1066, 2011.
[15] B. Mainali and S. Silveira, “Financing off-grid rural electrification: Country case Nepal,” Energy, vol. 36, no. 4, pp. 2194–2201, 2011.
[16] D. Mans, “Back to the Future: Africa’s Mobile Revolution Should Inspire Rural Energy Solutions,” Huffington Post, 20-May-2014.
[17] L. A. Odarno, “Negotiating the Labrynth of Modernity’s Promise: A Paradigm Analysis of Energy Poverty in Peri-Urban Kumasi, Ghana,” University of Delaware, 2014.

Filed Under: Energy Access, Energy and Climate Investment, Energy Markets, Renewable Energy, Uncategorized Tagged With: Abundant Energy, Clean Energy Financing, Energy Access, Energy Markets, Innovation, Renewable Energy, Water-Energy Nexus

December 23, 2015

China’s Cap-and-Trade Decisions

By Joseph Nyangon
How China Can Shape the Future of Carbon Markets

About 75% of current electricity supply in China comes from thermal power generation, mostly coal-fired power plants. In the above February 17, 2015 photo, a man cycles past cooling towers of coal-fired power plants in Fuxin, a prefecture-level city in northwestern Liaoning province, China (AP Photo/Greg Baker).

In the lead-up to the 2015 Paris climate change conference, policymakers stressed the need for creation of integrated carbon markets and called for linking new climate financing mechanisms with the United Nations-organized Green Climate Fund (GCF) based in South Korea. Both the U.S. and China have committed to accelerating the transition to low-carbon development internationally. Through a $3 billion per year pledge to GCF by the U.S. and a new $3.1 billion climate finance guarantee by China to support other developing countries to combat climate change, the two countries have committed to enhance multilateral climate cooperation. [1]

Carbon markets have emerged as part of the solution to the problem of climate change. Examples of these markets include the EU Emissions Trading System (EU ETS), the Regional Greenhouse Gas Initiative (RGGI) in the U.S., and the Western Climate Initiative (a joint program of California and two Canadian provinces – British Colombia and Quebec). New cap-and-trade schemes for 2016 have been announced by South Korea, Switzerland, Kazakhstan, and China (which will test models with seven ETS pilots).

While carbon markets are being used more frequently as a policy option, the question remains if such markets will actually reduce emissions and make development more sustainable. A common worry is how cap-and-trade decisions would be balanced with those stemming from often regulated markets governing carbon-intensive sectors, especially energy commodity markets, which have a clear growth orientation.

On his historic state visit to the U.S. in September 2015, Chinese President Xi Jinping announced new and strengthened climate actions, including the establishment of a national cap-and-trade program for carbon dioxide (CO2) emissions by 2017. [1] The declaration made in Washington D.C. in a joint meeting with President Barack Obama builds on the historic November 2014 U.S.-China joint announcement on climate change, enhances bilateral and multilateral climate cooperation and together, provided momentum for securing the Paris Agreement—a historic climate change policy architecture to cut greenhouse gas (GHG) emissions and ramp-up mitigation and adaptation worldwide. This is truly a bright spot for cap-and-trade systems, especially considering the potential implications for China’s price-controlled energy sector. The nation accounts for nearly 30% of global GHG emissions, placing it as the world’s biggest emitting nation, followed by the United States.

China’s market-based carbon pricing system will be the world’s largest, and will apply initially to power generation, iron and steel industries, chemical firms, building materials, cement and paper-making industries, and non-ferrous metals manufacturing. The electricity sector is particularly important because China’s energy-related CO2 emissions are expected to grow until 2030. [2] For this reason, the discussion here focuses on the energy sector and how China can balance its domestic commitments in the electricity industry and the proposed nationwide ETS market to advance emissions trading as the most efficient policy instrument to address GHG emissions, in lieu of command-and-control or carbon taxes measures. While important details remain to be worked out, including the level of the cap, accreditation and verification systems, allocation of allowances, registry and market oversight, and regulations on the use of carbon offsets, the key takeaway is that China has signalled its commitment to achieving its post-2020 intention to move toward a low-carbon and climate resilient economy.

Here are six critical ways China can shape the future of carbon governance through reforms of its energy sector and a balanced ETS market development:

1. Develop a priority dispatch policy for renewable energy generation
This tool would enable China to prioritize power generation from renewable sources in its power sector. It would also establish distribution and dispatching guidelines to accept electricity from the most efficient and lowest-polluting fossil fuel power generators first. China has committed to implementing a clean electricity dispatch system. The 2005 landmark Renewable Energy Law includes a provision for a priority “green dispatch” system in the power sector but its actual implementation has been difficult because of the current structure of the power system. This is particularly critical for China because even though it now leads in global wind and solar energy manufacturing, 75% of its current electricity supply comes from thermal power generation, mostly coal-fired power plants.

2. Ensure state-owned and private energy companies have equal rights and liabilities in the ETS
Most state-owned Chinese companies enjoy monopoly positions due to the current political system and state capitalism policy, which give them a dominant position in the energy and power sector. Success of a nationwide cap-and-trade policy will depend upon rules in which state-owned and private energy firms have equal responsibility to avoid carbon emissions. Such a responsibility would obviate fears that the state industry sector would have undue control of the energy market and the potential to manipulate electricity prices.

3. Ensure transparency in allocation of allowances and trading rules
For the success of a nationwide carbon market, China must encourage full participation of companies, especially energy and power firms, by addressing current concerns that ETS will increase their production costs or reduce profits. The experience of the EU ETS demonstrates that cap-and-trade as a policy instrument can fail if there is insufficient political will to limit the number of available allowances to energy-intensive production sectors.

4. Establish independent carbon market monitoring systems
The central government selected the National Development and Reform Commission (NDRC) and the Provincial Development and Reform Commissions (PDRCs) as the lead authorities responsible for managing its ETS pilots. Because energy and power sectors are controlled by the National Energy Administration (NEA), [3] a department affiliated with NDRC, establishing an independent carbon market monitoring body could help to promote the development of the ETS in China and diminish potential institutional imprinting challenges from the old system.

5. Increase the share of non-fossil energy sources and establish a carbon intensity cap
Economic restructuring to promote low-carbon development, promoting technology advancement and improving energy efficiency are essential strategies for mitigating GHG emissions. These strategies as well as implementing measurable targets for CO2 intensity would help China to explicitly address climate protection concerns (e.g., increasing the share of non-fossil energy composition in the mix of primary energy sources, and creating carbon trading exchanges). In addition to improving energy efficiency and increasing renewable energy generation, establishing a carbon intensity cap would be an important step toward an eventual introduction of a nationwide ETS.

6. Establish inter-regional carbon trading
China’s twenty-three provinces differ with respect to economic strength, industrial composition and related energy demands, making implementation of a national carbon trading a daunting challenge. The initial pilot ETSs (begun in 2013) did not allow inter-regional carbon trading. At the national level, this would be critical to carbon governance in China and should be developed via a bottom-up approach to achieve numerous mandatory intensity and efficiency targets.

China has a unique opportunity to shape the future of carbon markets. Its pilot carbon trading experience, industrial structure, economic development and capacity to link its national ETS with other schemes give the country a distinguished advantage. A future well-linked Chinese national ETS with other schemes internationally will require harmonisation of rules, reliable emissions accounting, mutual acceptance of the scheme caps, and enforcement of trading regulations in all participating jurisdictions. Although China’s pilot ETSs are at a very early stage and assessing them in terms of impact on emissions reduction and regional integration of carbon markets would be immature, certain problems are apparent when one examines the potential of the carbon market. These issues concern transparency in allocation of allowances and the effectiveness of legal enforcement, lack of unified ETS framework at the inter-regional level, and incentive-inducing policy tools.

Final Remarks
China’s pledge to create the world’s largest market-based carbon pricing system is an exciting step and demonstration of its commitment to achieve a unified ETS market and to pursue a low carbon economy. Can China innovate on both economic and environmental fronts, bringing these key factors together to boost the next phase of climate-resiliency? Any change in the Chinese energy sector will surely have a global impact, and striking the right balance to realize just and sustainable solutions to the problems of climate change will place the country in a strong carbon leadership position.

Notes
[1] White House Joint Presidential Statement: https://www.whitehouse.gov/the-press-office/2015/09/25/us-china-joint-presidential-statement-climate-change
[2] The Chinese ETS Pilots: An IETA Analysis: https://www.ieta.org/assets/China-WG/ieta%20china%20pilots%20analysis%20feb%2026.pdf
[3] Chinese Government Releases Major Policy Guidance on Renewable Integration and Related Issues: https://www.raponline.org/featured-work/chinese-government-releases-major-policy-guidance-on-renewable-integration-and-related

Filed Under: Carbon Markets, Energy and Climate Investment, Energy Markets Tagged With: Carbon Markets, Carbon Trading, China, Energy Markets, Green Dispatch

February 19, 2015

Water: An Additional Reason for Rapid Deployment of Sustainable Energy Technologies

By Jeongseok Seo

waterNo one denies the importance of water. Our life depends on it and we need it to survive. However, we don’t always know the worth of water until the well runs dry or unless we live in drought-stricken parts of the world.

Many studies occasionally remind us of the importance of water. For example, the World Health Organization reports that 748 million people still lack access to clean drinking water and 2 million annual deaths are attributable to unsafe water, lack of sanitation and unhygienic conditions [1]. Furthermore, with growing concerns of climate change, water shortages are expected to become worse in the near future. Current projections of population and water demand growth, particularly in developing countries, and climate change impacts have led some to project that in 2030 global water demand will outstrip current supply by 40 percent [2].

Interestingly, a big water consumer is the energy sector. In 2010, global water withdrawals for energy production were estimated at 583 billion cubic meters or 15% of the world’s total water withdrawals [3]. This suggests that the energy sector can play a great role in addressing water problems if we find energy sources and technologies requiring less water. If we fail this task, we could face two crises in the coming decades – energy and water deficits [4].

Sustainable energy technologies, such as solar PV and wind power, can serve this role. Unlike fossil-steam (coal-, gas- and oil-fired plants on a steam-cycle) and nuclear power plants, they not only use very small amounts at the site of electricity generation but also have little or no water use associated with the production of fuel inputs [3][5]. For example, wind and solar PV barely require water to produce 1 MWh of electricity, while coal- and gas-fired plants and nuclear power plants use 390, 180, and 560 gallons of water, respectively [5]. And if we practice energy conservation, we can actually cut water use for the sector.

These facts provide a key reason for rapid deployment of sustainable energy technologies: our health and environment improve when we make thoughtful energy choices!

Notes

[1] World Health Organization (2014). UN-water global analysis and assessment of sanitation and drinking water (GLAAS) 2014 report: investing in water and sanitation: increasing access, reducing inequalities.
[2] The 2030 Water Resources Group (2009). Charting Our Water Future: Economic frameworks to inform decision-making.
[3] IEA (2011). Water For Energy: Is energy becoming a thirstier resource? Excerpt from the World Energy Outlook 2012.
[4] Wang (2009). Integrated Policy and Planning for Water and Energy. Journal of Contemporary Water Research and Education. Issue 142, pages 1-6, June 2009.
[5] Glassman D., Wucker M., Isaacman T., Champilou C. (2011). The Water-Energy Nexus: Adding Water to the Energy Agenda. A World Policy Paper.

Photo credit: U.S. Department of Energy

Filed Under: Renewable Energy, Water-Energy Nexus Tagged With: Energy Markets, Environmental Justice, Water-Energy Nexus

February 17, 2015

Obama’s Budget Proposals for Clean Energy and Climate Investment

By Joseph Nyangon
Investment in R&D is crucial to achieving simultaneously the objectives of economic growth and sustainable development.

A cross-country theme in the clean energy programs supported by the Obama budget proposal is the need for federal and private funding for research and development. Photo: Shutterstock
A cross-country theme in the clean energy programs supported by the Obama budget proposal is the need for federal and private funding for research and development. Photo: Shutterstock

President Obama has released a $4 trillion budget proposal for FY 2016. It contains a range of programs designed to encourage the deployment of next-generation clean energy and energy efficiency technologies. Here are the top five things to know about the budget in terms of clean energy and environmental investments:

1. Clean Power State Incentive Fund
The U.S. President proposes a $4 billion incentive fund to encourage states to make faster and deeper cuts in carbon emissions from electricity than would be required under the Clean Power Plan. The Environmental Protection Agency (EPA) is to administer the Clean Power State Incentive Fund, which would enable states to invest in activities that advance and complement the agency’s Clean Power Plan. The administration outlines several goals, including addressing impacts from the environmental pollution in low-income communities to supporting businesses to catalyze investment in renewable energy, energy efficiency and combined heat and power. The budget also includes $239 million to support reductions in greenhouse gas emissions programs at the EPA [1]. In particular, $25 million would be used to help states develop their Clean Power Plan strategies.

2. Permanent extension of renewable energy investment tax credits
The renewable energy Production Tax Credit (PTC) has been an important lifeline for the wind industry in the United States. It expired at the end of 2013 and Congress agreed to a one-year extension, which expired in 2014. Tom Kiernan, CEO of the American Wind Energy Association (AWEA), has called on Congress to extend the PTC, noting that “Investing in wind power makes sense and that the Production Tax Credit is the right policy to continue growing this abundant, homegrown resource.” [2] The FY 2016 budget proposal concurs, proposing a long-term and stable clean energy policy based on a permanent extension of solar and wind investment tax incentives, and reforming the incentives to make them simpler and more efficient. A separate incentive scheme for solar, the Investment Tax Credit (ITC), which authorized a 30% tax credit through 2016 before falling to 10% thereafter is set to expire at the end of 2018. The administration has proposed a permanent extension.

3. Increased investment in clean energy technologies and R&D
The administration has proposed an investment of $7.4 billion in pollution-cutting technologies—an increase of nearly 7% [3] from the $6.5 billion allocations in the FY 2015 [4], for clean energy programs and sustainable technologies. These investments in solar, wind, low-carbon fossil fuels and energy-efficiency initiatives primarily cover programs at the departments of Energy, Defense, Agriculture, and the National Science Foundation. Examples of the programs outlined in the budget include investment in electric vehicles to enhance their affordability and convenience; improvement in building efficiency programs; climate-proofing electric power grid such as storm hardening, flood-proofing, installing higher temperature-rated transformers and replacing underground transformers with saltwater submersible types; carbon capture and storage; and investment in research and development (R&D) to measure and mitigate fugitive methane emissions from natural gas systems.

4. Advancing international climate negotiations efforts and investing in the Green Climate Fund
The budget also provides $1.29 billion to advance the goals of the Global Climate Change Initiative and the President’s Climate Action Plan (which supports bilateral and multilateral engagement with major and emerging economies). This includes $500 million for U.S. contributions to the U.N.’s Green Climate Fund (GCF) to help catalyze additional private sector support for international climate action and $230 million for the Climate Investment Fund. So far, the GCF has received pledges totaling $10.2 billion from countries such as Japan, South Korea, Norway, Mexico, Sweden, United Kingdom, Indonesia, Mongolia, and more. [5]

5. Energy and climate resilience
The budget contains a panoply of provisions designed to help vulnerable parts of the country enhance their energy and climate resilience and preparedness, including increased investments in community and ecosystem resilience, and a better understanding of the projected impacts of climate change. For example, allocation of $400 million for National Flood Insurance Program Risk Mapping efforts, an increase of $184 million over FY 2015 funding levels. Additional funding has been proposed to tackle coastal resilience, wildfires, and drought resilience. These include $50 million towards the NOAA Regional Coastal Resilience Grants, $89 million to promote water conservation efforts, and $200 million to FEMA primarily for mitigation planning and facilities hardening, an increase of $175 million over current funding levels.

A cross-country theme in the clean energy programs supported by the Obama budget proposal is the need for federal and private funding for R&D [6]. The United States enjoyed remarkable success recently because of pharmaceutical and biomedical research (even if proponents of the free-market often less understand it). From securitizing energy efficiency retrofits to unlocking capital in private equity and pension funds to harnessing green bonds, investment in R&D to fund projects targeting climate resilience and low-carbon technologies is crucial to achieving simultaneously the objectives of economic growth and sustainable development. It is why analyzing the trend in federal budgetary allocation for clean energy investment is vital for understanding signals of long-term economic transformation. In every dimension of clean energy economic growth, there is a critical technological need, which must be underpinned by increasing capital flow in basic scientific research.

Notes
[1] Nyangon, J. (2015). Impacts of shale boom in the U.S. and beyond. FREE. https://freefutures.org/impacts-of-shale-boom-in-the-u-s-and-beyond/
[2] The state of the wind industry is strong: https://thehill.com/blogs/congress-blog/energy-environment/230248-the-state-of-the-wind-industry-is-strong
[3] Obama 2016 budget urges states to cut emissions faster: https://www.reuters.com/article/2015/02/02/us-usa-budget-energy-idUSKBN0L60AF20150202
[4] Budget of the United States Government, Fiscal Year 2015: https://www.whitehouse.gov/sites/default/files/omb/budget/fy2015/assets/budget.pdf
[5] Green Climate Fund Initial Resource Mobilisation: https://news.gcfund.org/wp-content/uploads/2015/02/pledges_GCF_dec14.pdf
[6] Nyangon, J. (2015). Why the U.S. urgently needs to invest in a modern energy system. FREE. https://freefutures.org/why-the-u-s-urgently-needs-to-invest-in-modernizing-its-energy-infrastructure/

Filed Under: Energy and Climate Investment, Energy Economics, Renewable Energy Tagged With: Decarbonization, Energy Markets, Innovation, Natural Gas, Sustainable Investing

January 28, 2015

Pathways to Deep Decarbonization Report

By Jeongseok Seo

For deep decarbonization of each country to be realized, three common tools are needed: energy efficiency and conservation, low-carbon electricity, and fuel switching.
For deep decarbonization of each country to be realized, three common tools are needed: energy efficiency and conservation, low-carbon electricity, and fuel switching.

Pathways to Deep Decarbonization 2014 Report is an inaugural effort of the Deep Decarbonization Pathways Project (DDPP). Launched in Seoul in October 2013, the DDPP is “a collaborative initiative to understand and show how individual countries can transition to a low-carbon economy and how the world can meet the internationally agreed targets for limiting the increase in global mean surface temperature to less than 2 degree Celsius” [1]. This report is prepared jointly by 27 partner organizations from 15 member countries and published by Sustainable Development Solutions Network (SDSN) and the Institute for Sustainable Development and International Relations (IDDRI), which are leading the project.

Key findings of this report show that total CO2-energy emissions from 15 preliminary deep decarbonization pathways (DDPs) identified can lead to a decrease in emissions by 45%. While this does not achieve the full decarbonization needed to assure to stay below 2 degree Celsius limit, the report stresses that pathways can be immediately implemented, which moves us substantially toward a global goal of living sustainably. For deep decarbonization of each country to occur, the report provides three common tools: energy efficiency and conservation, low-carbon electricity, and fuel switching [2].

This report can be viewed as a general guidance document for how a country can contribute to the global efforts in limiting the 2 degree Celsius threshold. Detailed analyses for individual countries will be released on the DDPP website. Two country-level reports have so far been released: the U.S. and Australia, and a report on France is scheduled to be released in the first half of 2015.

While many analysts would find much to agree with in terms of the value in identifying and developing deep decarbonization pathways, the objective of this report has also raised concerns. First, the underlying principles and assumptions of the report appear to be rooted in eco-modernization principles, in which humans not only fix severe problems like climate change but also can secure continued economic growth vis-à-vis technological innovations and through advancement in environmental management. While this perspective seems to be popular, it can be criticized for its dependency on experts and bureaucrats, most of whom are rarely exposed to the difficulties arising from climate change [3]. Some also object to an initiative like this because it seeks to endorse a vain ambition to ‘master’ nature. And some will criticize the effort for its failure to include NGOs in the pathway-building exercise [4]. Participation from civil society in each country could enrich country-level reports which will follow. Even so, DDPP is worth the attention of researchers and citizens seeking ideas on how to build a sustainable future.

References

[1] Deep Decarbonization Pathways official website: https://resources.unsdsn.org/pathways-to-deep-decarbonization-2014-report
[2] SDSN and IDDRI. Pathways to Deep Decarbonization 2014 Report. Sustainable Development Solution Network and the Institute for Sustainable Development and International Relations (IDDRI). Retrieved from: https://unsdsn.org/wp-content/uploads/2014/09/DDPP_Digit.pdf
[3] Glover, Leigh (2006). Postmodern Climate Change. New York: Routledge.
[4] Byrne et al. (2002) “The Production of Unequal Nature,” in Environmental Justice, Discourses in International Political Economy (New Brunswick, NJ: Transaction Publishers)

Filed Under: Energy and Climate Investment, Energy Economics, Renewable Energy Tagged With: Decarbonization, Energy Efficiency, Energy Markets, Innovation, Renewable Energy, Sustainable Investing

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