WASHINGTON — As policymakers gear up for the 2017 United Nations Climate Change Conference (COP 23) in Bonn, the U.N. special representative for sustainable energy has called on them to ensure a “smooth and speedy energy transition” for all, resisting the urge of a “last gasp” for coal financing.
Rachel Kyte delivered her remarks at the launch of the Initiative for Sustainable Energy Policy, which is designed to develop innovative energy policy recommendations for emerging economies and is run out of the Johns Hopkins School of Advanced International Studies.
Kyte said the project could play an important role in accelerating progress toward Sustainable Development Goal 7, which aims to connect everyone in the world to energy by 2030, while also keeping to the Paris Agreement by delivering this in a climate-friendly way. A big part of this will lie in helping governments “pivot” away from the old energy provision models — based on centralized, fossil fuel-based utilities — toward newer decarbonized and decentralized models, Kyte said.
“I hope this initiative can help … usher in a new generation of policymakers and policies that see that the provision of energy services is very different in the future than the way we have provided them in the past,” she said, adding that if ISEP can help overcome this “big stumbling block,” it will pave the way for “one of the greatest pivots of our time.”
Addressing an audience gathered at the SAIS campus in Washington, D.C., Kyte — who is also CEO of Sustainable Energy for All, a multi-stakeholder initiative to drive the SDGs’ energy agenda — outlined seven major challenges that need to be overcome in order to ensure a “smooth and speedy” energy transition.
1. Access to electricity is still neglected
Despite the fact that more than 1 billion people still live without electricity, mostly in rural parts of sub-Saharan Africa and south Asia, meeting their needs has “surprisingly … not been the focus of energy policy for many countries,” the former vice president for climate change at the World Bank explained.
“Integration” of services will be critical to addressing this access gap, she said, for example, by being able to combine different systems including on- and off-grid as well as energy from renewables. Similarly, Kyte suggested providing electricity through nontraditional projects, which are not “energy in their nature” — for example, by putting solar panels on a school roof and then offering parents the opportunity to charge their devices while their children attend lessons. Setting up and managing such “bundling of services” will require government policies, she added.
2. Energy efficiency is “overlooked and unloved”
The World Bank has launched a new scorecard that looks at the sustainable energy policies in 111 countries, marking them green, yellow and red. The scorecard, and accompanying report, reveal policies in sub-Saharan Africa are far behind those in other countries, and that many countries are failing to take advantage of "quick win" energy efficiency policies.
Energy efficiency offers governments the cheapest and easiest way to “bend the emission curve,” while also potentially creating skilled jobs at a time when the automation shift is challenging employment, Kyte said. However, despite these advantages, few countries are taking efficiency seriously and “there’s huge room for improvement,” she said. This is clearly shown by the recently launched World Bank indicators — known as RISE, or Regulatory Indicators for Sustainable Energy — which rank 111 countries based on their policy and regulatory frameworks across three areas: energy access, energy efficiency, and renewable energy, as Devex reported.
“So how to make energy efficiency sexy again is a very important challenge for this new initiative,” she said.
Part of this will come by thinking beyond the power generation sector and looking at how to make transport and infrastructure more efficient, she said. Household appliances also offer major potential — making televisions, radios, fans, and air conditioning units “super-efficient” and cheaply available to low-income families. Kyte sees “enormous” market potential for this, and also political opportunity: providing better services for less money is something a party “could run on and win,” she said.
3. Carbon capture and use
Carbon capture and storage will be a “significant piece” of the energy transition puzzle, according to Kyte, but currently governments are “tangled up around” the issue, she said. For example, while the United Kingdom recently announced it will restart financing for CCS, Norway has said it will cut 90 percent of its funding due to cost concerns.
At the same time, Kyte said the real emphasis needs to be on carbon use — such as turning carbon dioxide into building materials and substitute fuels, for example — alongside capture and storage. “I don’t see a market now or in the future for capture or storage on its own, but for use, yes,” she said.
But big questions remain around who pays for carbon capture, storage, and use — government, companies, individuals, or development finance institutes — and these questions “need to be worked on now,” Kyte added.
4. A future without coal
“The tussle over coal continues,” Kyte said, and while she is sympathetic to generations of coal miners who have had “the carpet … ripped from underneath them” as the world moves away from the fossil fuel, she was firm in her stance that there is no place for coal in future energy plans. She called on policymakers to ensure these coal communities are supported through the transition.
“We know how to help communities through transition … delaying debate on that or portraying it as anything else is delaying the job at hand,” she said.
However, if we are to avoid a “last gasp” of the coal industry, especially in developing countries, “the international community [needs] to come together and offer better alternatives [and] not just analysis,” she said, as well as presenting a “pathway forward with available finance for those alternatives.”
5. Infrastructure finance
According to Kyte, infrastructure finance has been a “sorry story” and an “enormous missed opportunity” over the past decade due to the international community’s failure to take advantage of low interest rates to push sustainable infrastructure development. However, she said things were changing thanks to the rise of “green banks” and regional banks, which are starting to invest in places where international finance will not go. Furthermore, Kyte is skeptical about the World Bank’s “billions to trillions” narrative, and thinks greater emphasis needs to go on mobilizing domestic investment efforts instead.
“There’s an enormous fascination with the idea that there is all this trapped capital in pension funds … of the developed world and that … a couple of magic buttons … need to be pressed and all that capital will find its way into large-scale infrastructure projects in developing countries,” Kyte said. “But that’s not going to happen now or any time soon,” she added.
A recent Sustainable Energy for All “Energizing Finance” report revealed that public and private, international and domestic commitments for electricity in the 20 countries with the greatest need are less than half of what they need to be — investment for 2013-14 averaged $19.4 billion per year while an estimated $45 billion is needed to close the energy access gap.
6. Changing mindsets
The energy transition involves moving from “static and centralized” energy systems that run on fossil fuels, toward integrated and distributed systems that represent the “democratization of the way in which people achieve their energy needs.” This shift is both “exciting and terrifying” for regulators and institutional managers in the old energy system, said Kyte. It is where she believes initiatives such as ISEP can make a difference by supporting countries to develop their energy plans as they try to meet the targets set by the sustainable development agenda, the Paris Climate Agreement, and their own government’s campaign targets.
However, developed countries, especially those within the G-7 and G-20, need to play their part, and “not throw bad money after good,” Kyte said, which means getting rid of all subsidies, export credits, and other “perverse policy instruments,” which are “simply out of line” with their climate and sustainable development commitments, and have “no place in the kind of energy transition we want to move through.”
7. Furthest to reach
“Focusing on those traditionally beyond the energy system is actually something which needs to be front of mind in policymaking,” Kyte said, if we are to reach the combined commitments of the Paris Agreement and the SDGs, which call for both decarbonizing energy systems and at the same time making them more inclusive. Reaching the 3 billion people who still lack access to clean cooking facilities and thus “can’t cook without endangering their children’s health” must be near the top of the list, said Kyte. At just $32 million between 2013 and 2014, financing for clean cookstoves is falling far short of the estimated $4.4 billion needed annually, according to Sustainable Energy for All.
This means developing a biofuel market while not contributing to deforestation, bundling services for the poorest of the poor, and figuring out how to reach women who “are the face of that particular piece of the problem,” she said.
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