Climate change negotiations 2011: renewable energy as an opportunity for developing countries?
The major failure of the recent Bonn climate change negotiations was the issue of a second commitment period under the Kyoto Protocol. Most developed countries claimed that a new legally-binding framework should include all major emitters. Developing nations’ current request is an extension of Kyoto, which obliges almost 40 industrialised nations to cut greenhouse gas emissions by 5.2% below 1990 levels during 2008-12. The world's largest greenhouse gas emitters – China and the United States – have never ratified the Kyoto Protocol.
The demand of developing countries is supported by a recent shocking report of the Stockholm Environment Institute which examines Cancun Agreements for the purpose of comparing developed countries’ (Annex 1) pledges to developing countries’ (non-Annex 1) pledges. It finds that there is broad agreement that developing country pledges amount to more mitigation than developed country pledges. This conclusion applies across all studies and the various cases examined within the report, despite the diversity of assumptions and methodologies employed and the substantial differences in quantification of the pledges.
The low commitment from rich nations to reduce emissions is unsurprising when viewed alongside scientific evidence such as my own recent paper that suggests rich major emitters (USA, the European Union, and other high-income nations) will continue to retain the highest share of emissions over time. Countries such as Australia, USA and Japan have already stated that they do not favour signing post-2012 emissions constraints agreements.
The good news is that 2010 saw record levels of investment in clean energy – US$243 billion and a 30% increase on 2009 levels – although this positive data didn’t stop the growth of energy related emissions, which grew by 5.5%. A recent IPCC report claims that we could meet as much as 43% of global energy demand with renewable sources by 2030, and up to 77% by 2050 (renewable energies accounted for 13% in 2008). Based on data from 164 scenarios examined, closer to 30% renewable penetration appears more realistic, however.
Of the 300 gigawatts (GW) from new electricity-generating power plants established globally in 2008 and 2009, nearly half (140 GW) came from renewable sources. Investments in renewable energy to stabilise atmospheric CO2 levels at 440 ppm (parts per millions) would cost approximately US$5.1 trillion from 2011 to 2020 and US$7.2 trillion from 2021 to 2030 globally.
Scientific evidence shows that international agreements to limit emissions would speed up green technological change and the transition towards renewable energy, but rich countries are unable to reduce their growth patterns after the financial crisis, and developing countries claim that rich countries should bear the highest share of the abatement effort as they were primarily responsible for the past accumulation of greenhouse gas emissions.
If COP17 in Durban fails to overcome the current stall in international negotiations to reduce emissions, at least some actions should be agreed to ensure a sustainable growth path in developing countries. For those working on the European Report on Development 2011-2012, priorities include:
1) A decision to remove fossil fuel subsidies. A good starting point could be the Busan June 2010 communiqué welcoming the strategies and timetables provided by many G-20 members to rationalise and phase out inefficient fossil fuel subsidies that encourage wasteful energy consumption. The recent decision by Egypt to phase out fossil fuel subsidies by 2011 represents an encouraging step forward in the developing world.
2) Full implementation of the pledges made by rich countries at COP 15 in Copenhagen to provide US$100 bn to developing countries for adaptation and mitigation measures. Durban could be the right place to discuss how these funds should be used to exploit the potential of renewable energy for sustainable growth.
3) A coordinated set of domestic policies in rich countries to implement carbon pricing systems. Whereas countries such as Australia have already announced their intent to implement a cap and trade system, the debate is still open in the USA as Congress seems more oriented towards setting a carbon tax policy. Durban could be the right place to plan coordination of domestic policies.
The real challenge for the future is to introduce policy measures that can really enhance inclusive and sustainable growth in developing countries – which is the focus of the ERD 2011-2012. Funds from the removal of subsidies could be used to compensate fossil energy exporting countries which could otherwise lose out by the implementation of this policy. And those pledged during COP15 negotiations should be addressed towards inclusive and sustainable growth initiatives such as rural electrification through solar or biofuels. Data indicate that lack of electrification is still a major problem in regions such as sub-Saharan Africa, which also shows the highest world potential in terms of solar power.
Policies for national emissions trading schemes should be complemented by CDM (Clean Development Mechanisms)-type initiatives for renewable energy, set through the implementation of domestic agreements with developing countries.
Negotiations in Durban could confirm the failure of COP15 negotiations for a global deal to reduce emissions, but the world cannot afford inaction at this stage. At the very least, countries could reach a consensus on renewable energy and the end of incentives for fossil fuel energy. For the ERD 2011-2012 in particular, we are interested to explore how unexploited opportunities for investments in renewables can be realised and work for inclusive and sustainable growth.
Author: Nicola Cantore, ODI Research Fellow