Energy

New low-carbon development, investment and governance models needed to achieve SDGs: UNDP Report

The transition in energy use is more important in the wake of the COVID-19 pandemic

 
By Susan Chacko
Published: Thursday 13 May 2021
New low-carbon development, investment and governance models needed to meet SDG: UNDP

Low-carbon development is a prerequisite for achieving sustainability and it offers a credible, effective and efficient path to accelerate towards more climate-friendly and environmentally sound development globally, a new report by United Nations Development Programme (UNDP) and China Centre for International Economic Exchanges (CCIEE) said.

The novel coronavirus disease (COVID-19) pandemic has illustrated that the world's development path is unsustainable and that environmental problems have serious health implications.

The impacts of the pandemic have translated into a demand shock in the energy sector. Coal and oil were the hardest hit in 2020 and suffered from shrinking demand the most.

For coal, this is mainly caused by the forecasted decline of global electricity demand and for oil, by a sharp demand decline in the transportation sector. Meanwhile, renewable energy power generation is expectedto increase in 2020.

The role of power sector in achieving low-carbon energy transition is important as the sector is one of the largest sources of greenhouse gases like carbon dioxide. Thus, it has a huge potential to effectively cut emissions with innovative power technologies.

“Shifting to a low-carbon path will require developing, deploying and transferring clean energy technologies at scale through broad international and interregional energy cooperation,” said Beate Trankmann, UNDP Resident Representative in China.

Low-carbon development has great potential in countries and regions part of the Belt and Road Initiative (140 countries) but is still challenging.

Most countries still heavily depend on fossil fuels for energy generation. While natural resource endowments differ, coal is widely available in many regions that have huge existing or potential energy demand but few alternative energy choices.

On an average, more than two coal-burning power stations are constructed in the developing world each week. Reducing GHG emissions and local pollution from fossil fuel combustion and processing thus remains one of the world’s most significant challenges in the foreseeable future.

There is no one-size-fits-all low-carbon pathway for all countries due to the significant differences in each country’s economic structure, natural resource endowment, technologic alabilities and stage of development. Policy makers should, therefore, set priorities in accordancewith their respective national conditions and sustainable development goals.

According to the report, in developing countries where the access to electricity is less than the world average (89.6 per cent) such as Myanmar (66.3 per cent), Pakistan (71.1 per cent), Ethiopia (45 per cent), Madagascar (25.9 per cent), Nigeria (56.5 per cent), Uganda(42.7 per cent) and Zambia (39.8 per cent), improving people’s access to electricity might be more urgent than advancing clean electricity.

In other words, the principle of “common but differentiated responsibilities and respective capabilities” and fairness emphasised in the Paris Agreement should be fully respected.

In regions along the Belt and Road Initiative (BRI), there have been 102 clean and renewable energy projects under the BRI, with a total value of $104.95 billion by the end of 2019.

The report focused on providing three key pathways to facilitate low-carbon development within China and globally:

  • Boosting clean energy development
  • Channelling sustainable finance and investment
  • Strengthening capacity building

Given fluctuations in the availability of renewable energy sources and the often wide geographic distances between where it is generated and where it is consumed, the reportemphasises the importance of enhancing energy flexibility (including through grid-scale batterystorage) and network integration.

These are key in facilitating higher shares of variable renewableenergy sources in the energy mix. To bring out and strengthen the cost advantage of renewable energy over fossil fuels, the report recommended evaluating investment and financing proposals using harmonised carbon indicators and enhancing policy incentives to support low-carbon energy projects.

The report is the fourth in the series of the Global Governance Report by UNDP and CCIEE, focussing on paving the way for low-carbon development globally and along the Belt and Road.

With the right set of policies and incentives-relative prices, low carbon development along the Belt and Road can be attained in a cost-effective and impactful way, enhancing sustainability in all participating countries and making a critical positive contributionto global environment.

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