|Department of Public Information • News and Media Division • New York|
Sixty-third General Assembly
on Energy (AM & PM)
WORLD POISED AT CROSSROADS ON ENERGY, WITH DIRECTIONS LEADING TO SUSTAINABLE FUTURE
OR ABYSS, SAYS SECRETARY-GENERAL, AS GENERAL ASSEMBLY HOLDS THEMATIC Dialogue
Assembly President Says Prospects for Renewable Energy ‘Never Looked Better’;
Panels: Status of Energy Efficiency, Renewables; Investments to Meet Challenge
“We stand at a crossroads”, with one direction leading to an abyss and another to a more sustainable, prosperous and stable world if countries use energy more efficiently and harness the untapped potential of renewable sources, United Nations Secretary-General Ban Ki-moon declared today, as he opened an interactive thematic dialogue on energy.
The day-long event ‑‑ entitled “Energy Efficiency, Energy Conservation and New and Renewable Sources of Energy” ‑‑ brought together representatives of Governments, United Nations agencies and the private sector to explore ways to conserve energy, and both develop and transfer related technologies.
In opening remarks, Mr. Ban underscored that much could be done by pursuing energy efficiency. Some of the biggest improvements were found in the industry and transport sectors, with buildings and residential housing offering considerable opportunities. Educated and aware consumers also had an important role in reducing demand, by choosing how they commuted, which cars they bought and appliances they used.
Such ideas, however, needed strong Government policies, which effectively set standards, encouraged private actors to invest in efficiency improvements and changed incentive structures, so that electric utilities profit from conservation, he said. It was essential to understand that energy efficiency and renewable energy options were tools for promoting clean development that could de-link economic growth from rising greenhouse gas emissions.
For their part, Governments could make better use of the Clean Development Mechanism ‑‑ which allows industrialized countries to invest in projects in developing countries rather than make expensive emissions cuts at home. Most of those funds, until recently, had backed large-scale projects in rapidly developing nations.
“Transformation of the global energy market is under way”, Mr. Ban stressed, a point underscored by the fact that 2008 was the first year where investment in new power-generation capacity from renewable technologies had outweighed that of fossil-fuel power. Energy efficiency and renewable energy offered the chance to tackle many challenges at once ‑‑ climate change and poverty among them ‑‑ and he urged participants to realize that great potential.
President of the General Assembly Miguel d’Escoto Brockmann, while agreeing that the prospects for renewable energy “never looked better”, pointed out that the industrialized North was using far too much energy, while most other regions lacked enough access to energy to escape poverty. “The facts are stark,” he said: world energy consumption was expected to grow 40 per cent by 2030. Experts argued that a technology revolution was needed to reconcile growing energy needs with steps to mitigate climate change and the general carrying capacity of the planet.
He said that, in setting policies, it was important to be aware of the various costs involved in developing new and renewable energy sources. The costs of initial research and development could be a drawback and public funds for investment, coupled with official development assistance, were key. He urged that technologies be funded, with the assurance that initially higher costs would be offset by the availability of pollution-free energy later. When Governments gathered in Copenhagen, Denmark in December to finalize a new climate change agreement, he hoped the world would be presented with a whole new generation of financial incentives for reducing emissions and pursuing renewable energy.
In a morning keynote address, Hoesung Lee, Vice-Chair of the Intergovernmental Panel on Climate Change, addressed that point, saying that the stage was set for a low-carbon transformation of energy systems. To trigger a change, Governments had to support technology research and development, without which, stabilizing greenhouse gas concentrations would be impossible. A low-carbon future hinged on today’s decision to replace fossil-fuel based infrastructure with low-carbon technologies available at competitive costs. Also, when prices of goods and services included a social cost of carbon emissions, consumers would respond by using fewer of those products and services that were carbon-intensive.
In an afternoon keynote address, Mohamed Waheed Hassan, Vice-President of the Maldives, said his country had decided that “the time had come for global leadership” and would become the first carbon neutral nation in the world by 2020. More than a hundred wind turbines, half a square kilometre of photovoltaic solar panels, a biomass plant and back-up battery banks would provide the country with an unlimited supply of clean energy. The project came with a significant price tag, however ‑‑ $100 million per year for 10 years. But, with $200 million spent on imported fossil fuels per year, payback could be achieved in 20 years or less.
The day also featured two panel discussions. The first, entitled “Status and prospects: Energy efficiency and new and renewable sources of energy”, addressed issues around the most promising renewable and energy efficient technologies, constraints that hindered their wider deployment, efforts to deploy leading technologies at a scale that met sustainable development goals, and the potential of such technologies to improve energy access.
The panel was moderated by Timothy E. Wirth, President of the United Nations Foundation and featured presentations by Kandeh Yumkella, Director-General, United Nations Industrial Development Organization; Nebojsa Nakicenovic, Professor of Energy Economics at Vienna University of Technology and member of the Executive Committee of Global Energy Assessment; Joe Loper, Senior Vice-President, Policy and Research, Alliance to Save Energy; Leena Srivastava, Executive Director, TERI, India; and Sergio Garribba, Advisor on Policy, Italian Ministry of Economic Development.
The second panel ‑‑ entitled “Meeting the challenge: Investment and policies” ‑‑ explored the types of policies and investment needed to promote renewable and energy efficiency, particularly during the global financial crisis. Questions centred on which policies could stimulate technological innovation and action to take that would create legal incentives to promote investment.
Moderated by Vijay Vaitheeswaran, correspondent at The Economist, it featured presentations by Steen Gade, Member of Parliament, Denmark; Santiago Seage, Chairman and CEO of Abengoa Solar, Spain; Saio Mouline, Director-General of the Centre Marocain des Energies; Hélène Pelosse, Ministry of Energy, France; Irene Freudenschuss-Reichl, Ambassador and Director-General for Development Cooperation, Ministry of Foreign Affairs, Austria; and Tariq Banuri, Director of the Division for Sustainable Development, Commission on Sustainable Development Secretariat, Department of Economic and Social Affairs.
Launching the interactive thematic dialogue, President of the General Assembly MIGUEL D’ESCOTO BROCKMANN (Nicaragua) said it was only appropriate for the Assembly to take advantage of the wide-ranging and growing expertise on energy efficiency and conservation, and on new and renewable energy sources. The challenges brought about by climate change, the financial and economic crisis and the food crisis “converge, interact, fuel and aggravate each other”, he said.
Calling energy a “keystone” to economic development, he said the future survival of the species depended on being able to secure energy from dependable, safe and environmentally sound sources. At the moment, the world did not have a single source of energy or even the right mix of energy sources to meet its needs, putting it “clearly on an unsustainable energy path”.
But, he expressed the belief that people everywhere were becoming more aware of the problem, and were pressing for fundamental changes in the way energy was being used and from where it was being sourced. He said he believed the time for renewable energy had arrived. “The rapid increase in production during this time indicates the prospects for renewable energy had never looked better, even in the face of recession.”
He raised the question of inequitable energy patterns, with the industrialized North using “far too much energy” while most people of the world did not have access to enough energy needed to lift them out of poverty.
“The facts are stark,” he said, explaining that world energy consumption was expected to grow by about 40 per cent by the year 2030. “Experts argue that we need a technology revolution to reconcile development and our growing energy needs with steps to mitigate climate change and the general carrying capacity of the earth. How can we do this?”
He said the Minister of Foreign Affairs of Belarus, Sergei Martynov, was meant to take part in the thematic debate and had been one of the original advocates for such a meeting. But, he had been unable to join them today. Mr. d’Escoto had convened the thematic debate at the request of 18 concerned Member States.
Drawing attention to price fluctuations in the energy market, he observed that lower energy prices tended to have a negative effect on investment decisions in renewable energy. He said it was difficult to imagine policymakers reversing that trend, especially when most countries had scarce funds for counter-cyclical measures.
“Today we are locked in by our technology base. While technology is constantly being developed, there is a need for incentives to accelerate the process,” he said, urging States and the public sector to provide appropriate incentives to the private sector to support the goal of renewable energy.
“In setting policies, it is important that we are aware of the different costs involved in developing new and renewable sources of energy,” he added, saying each source of renewable energy ‑‑ solar, wind and hydropower ‑‑ had distinct advantages. But, the costs of initial research and development could be a drawback. Public funds for investment and official development assistance were key, but insufficient for now. “We must continue to fund these technologies and rest assured that the initial higher costs will be offset by availability of inexhaustible and pollution-free energy.”
He encouraged Governments to study the different ways that financial flows could be directed towards renewable energy in developing countries, such as through the clean development mechanism under the Kyoto Protocol. “When the world gathers in Copenhagen in December […] I hope we will be presented with a whole new generation of financial incentives,” he said, referring to the meeting of the Conference of the Parties to the Climate Change Convention slated for the end of the year. He said incentives could be developed to connect the flow of money from carbon markets in developed countries to development projects in developing countries.
Applauding the “bold, new vision” articulated by Washington, D.C., on energy, he said the world needed the commitment and leadership of major carbon-emitting countries to point the way forward.
In opening remarks, United Nations Secretary-General BAN KI-MOON reminded delegates that Governments would meet in Copenhagen in December to finalize a new climate change agreement ‑‑ one that must be comprehensive, fair and ambitious. Greenhouse gas emissions must be significantly cut and, to do that, the world must change how it used energy.
“We can achieve a lot by pursuing energy efficiency,” he said. Some of the biggest improvements could be found in the industry and transport sectors, with buildings and residential housing offering considerable opportunities. Educated and aware consumers also had an important role in reducing demand, by choosing how they commuted, which cars they bought and appliances they used.
However, all those ideas needed strong Government policies, he said. Good policy could set efficiency standards for appliances, vehicles and buildings, encourage private actors to invest in efficiency improvements and change incentive structures for electric utilities to ensure that they profited from conservation.
Strong policy could also boost renewable energy by enabling citizens and industry to generate their own electricity and feed it into the national grid, he said, and it was important that such policies be featured in discussions ahead of the meeting in Copenhagen.
It was also essential to understand that pursuing energy efficiency and expanding renewable energy were not indulgences for wealthy nations. “They are a tool for all,” he said. “They are a tool for promoting clean development”, which could help countries de-link economic growth from rising greenhouse gas emissions. Renewable and clean power ‑‑ from the sun, wind, geothermal or biomass sources ‑‑ offered a “step on the ladder of prosperity” for communities all over the world. They must be more widely available.
However, access to finance was an obstacle ‑‑ for villagers and large businesses alike. Renewable energy often required considerable capital outlay, but once functioning, involved small costs. Unlike coal-fired power stations, wind farms and solar installations needed no fuel.
He said Governments must do their part by using the Clean Development Mechanism (CDM) a lot more effectively. Until recently, most of CDM funds had backed large-scale projects in rapidly developing countries ‑‑ Brazil, China, India and Mexico among them ‑‑ while smaller projects in poorer countries, particularly in Africa, had missed out. Governments needed increased capacity to write winning CDM proposals, something the United Nations was working on. Today, more projects were being approved throughout Africa and elsewhere.
Turning next to climate change, he said that, while it was among the world’s biggest threats, it also offered a world of opportunity. Transformation to a green economy would not be easy ‑‑ it would need significant initial investment ‑‑ but it would pay off in the long run, by creating jobs, developing rural areas and combating deforestation.
Moreover, renewable energy was among the few sectors that had ‑‑ in some ways ‑‑ defied the global recession, with 2008 marking the first year that investment in new power generation capacity from renewable technologies was more than that in fossil-fuel technologies. “Transformation of the global energy market is under way,” he said.
To highlight that point, he said that Iceland, which was totally dependent on oil in the late 1970s and early 1980s, today generated nearly all its energy from geothermal and hydroelectricity. It was not alone: Africa’s Rift Valley was a hotbed of geothermal potential and Kenya was exploiting it. Other countries had considerable potential for generating solar and wind energy ‑‑ including oil-exporting nations ‑‑ and the United Nations was helping to map the best locations.
“We stand at a crossroads”, he said, with one direction leading to an abyss and the other to a more sustainable, prosperous and stable world. The choice should be clear. Energy efficiency and renewable energy offered the chance to tackle many challenges at once ‑‑ climate change, energy insecurity and poverty alleviation ‑‑ and he urged participants to realize that great potential. “Sustainable development is within our grasp,” he said.
Delivering a keynote speech, HOESUNG LEE, Vice-Chair of the Intergovernmental Panel on Climate Change, said that whatever the outcome in December, energy efficiency and renewable energy would be major vehicles for determining the level and speed of future greenhouse gas emission cuts.
“We need to put the task of energy efficiency and renewable energy in perspective,” he said. For the last 30 years, global carbon dioxide (CO2) emissions had jumped 1.9 per cent per year, while per capita gross domestic product (GDP) had increased 1.8 per cent and population 1.6 per cent. In that same period, energy and carbon intensity had both dropped. In that context, he pointed out that the effects of GDP and population growth had far outweighed the effects of energy efficiency improvement and fuel substitutions. However, energy and carbon intensity both had dropped, even though there had been no explicit policy intervention to encourage that over the last 30 years.
He said global greenhouse gas reduction would be possible only in a world where income and population growth were shadowed by the combined decreases in carbon and energy intensity. That presupposed rapid improvement of energy efficiency and the early retirement of fossil fuel resources. As the contribution of energy efficiency improvement would not adequately address climate change, renewable energy would need to shoulder the growing burden of climate stabilization.
The stage was set for a low-carbon transformation of energy systems, but what would trigger the change? He said, first, that greenhouse gas emitters must pay the price for their emission, while Governments had to support technology research and development. Without research and development, it would be economically impossible to stabilize greenhouse gas concentrations. In other words, a low-carbon future would be dictated by today’s decision to replace fossil-fuel based infrastructure with low-carbon technologies available at competitive costs ‑‑ which was not the current situation.
He explained that renewable energy technologies were grouped in four categories: technologically mature with established markets (hydro projects); technologically mature with new and immature markets (biodiesel); under technological development with demonstrations, limited commercial application (wave power); and technology research stages (organic and inorganic nanotechnology and solar cells).
Government support for research and development had remained constant over the last 15 years, he said. Induced technology change ‑‑ the primary result of research and development ‑‑ could substantially reduce the cost gap between traditional fuels and low-carbon alternatives. International cooperation in research and development was an excellent measure for achieving scale economies, financing leverage and effective technology transfer and deployment, as seen in the International Partnership for a Hydrogen Economy, among others.
But, such partnerships would go nowhere if carbon were emitted free of charge, he said. If the carbon price did not reflect the social costs of climate damage, nothing would happen to reduce emissions. It was vital to answer questions about the level and speed of greenhouse gas reductions, the timing of such cuts and the allocation of them among countries and industries. Estimated social costs for carbon ranged from $3 to $95 per ton of CO2, but such uncertainty did not excuse the world from implementing carbon prices. “We need to start from some level of carbon prices on the basis of scientific information available now,” he asserted. When the prices of goods and services included a social cost of carbon emissions, consumers would respond by reducing their consumption of those that were carbon-intensive. Changes in lifestyles would follow, sending powerful signals to producers.
However, he added, it would take decades before the current fossil fuel infrastructure would be replaced by low-carbon structures, because infrastructure had a long life and resistance to transition was strong. Carbon price was an intermediary for a smooth transition.
He concluded his remarks on a note of caution, saying that volatile prices generated uncertainty and hurt investment in low-carbon technologies. A carbon tax offered price certainty and was thus preferable to a cap-and-trade system. Such a tax was unpopular, but an energy subsidy could not be a substitute for a carbon tax. An energy subsidy was a bad policy, regardless of whether the recipient was a fossil fuel or alternative energy source. Finally, he said many cost-effective reduction opportunities existed, but users often did not adopt them, due in part to a lack of information and misaligned incentives. Regulations and standards could fill that gap.
“There is no one-size-fits-all, single road towards low-carbon sustainable development,” he said. Nations were different ‑‑ but carbon pricing, and research and development for energy efficiency and renewable technologies were a common denominator for diverse paths to a sustainable future. He urged participants to take advantage of their diversity and to learn from one another.
Prior to the afternoon panel discussion, the Assembly President, Mr. d’Escoto introduced the second keynote speaker, MOHAMED WAHEED HASSAN, Vice-President of the Maldives, saying that finding ways to achieve sustainable development through non-polluting energy was a moral imperative, as was the need to protect people living in small island States and other less developed countries.
Mr. HASSAN said his country was “living on borrowed time”, where the average height of its 2,000 tropical islands was a mere 1.5 metres above sea level, with an average size of about half a square kilometre. The height and size of those islands made them acutely vulnerable to rising sea levels and to the increasing acidity caused by climate change.
He said the country was determined to adapt to those changes, and was shoring up its sea defences in the most populous islands. It had constructed a sea wall around the capital city, Male, where a third of the population lived. That wall had protected the city from the 2004 Indian Ocean tsunami.
Estimates said that a third of all inhabited islands faced serious coastal erosion and were in need of protection measures, he said. But, hard engineering solutions did not come cheap, especially for a poor country. The Male sea wall had cost $60 million, which was a significant amount for a country with a gross domestic product of less than $1 billion. Protecting every inhabited island was difficult and the Government was encouraging people to move to larger and safer islands, although many were reluctant to move from places where their ancestors had lived for centuries and were buried.
Those dangers underscored how important it was for the Maldives to reduce greenhouse gases and forge a sustainable development path, he said. However, even though the Maldives played no significant role in causing climate change, it was determined to play a part in the solution. In March, the President had declared that it would become the first carbon-neutral country in 10 years. Since that announcement was made, it had received two kinds of reactions: eagerness to help, or scepticism.
Calculations had shown that 155 wind turbines, each 1.5 megawatts, coupled with half a square kilometre of photovoltaic solar panels, a biomass plant and back-up battery banks would provide an unlimited supply of clean energy, he said. They came with a significant price tag of $100 million per year for 10 years. But, with $200 million spent on imported fossil fuels per year, payback could be achieved in 20 years, or 11 years in the price of oil at $100 per barrel.
When asked why a country that contributed so little greenhouse gas emissions would bother to go carbon neutral, he said the country’s answer was that “the time has come for global leadership”. Having long been a strong advocate for alleviating the plight of low-lying vulnerable States, it would now shift the debate from a discussion of problems to a discourse on solutions. Since declaring the intention to achieve carbon neutrality, dozens of overseas companies had approached the country, keen to set up renewable energy projects in the country. Its development partners, including the World Bank, the International Finance Corporation (IFC), the European Union and the United Nations, had offered to work with the nation.
He added that the private sector in the Maldives was starting to pioneer environmentally friendly technologies, and that one leading luxury resort had gone carbon neutral this year. The resort used deep-sea water to cool its air-conditioning units, and turned organic waste into “biochar”, which was in turn used as fertilizer. Later in the year, the resort would install a concentrated solar power plant that would allow it to switch off its diesel power generators. It had built a windmill in India to offset the pollution caused by tourists’ airplane flights. That a seven-star resort could achieve carbon neutrality demonstrated that sustainable development, sound economics and quality of life were perfectly compatible.
Carbon neutrality would boost tourism, as increasingly eco-conscious tourists sought out “climate guilt-free destinations”, he said. The economy would also be more stable, as it decoupled from the unpredictable price of foreign oil and relied instead on the sun, sea and wind.
In addition to tackling the challenge of energy security and climate change, he said new and renewable sources of energy could play a key role in economic and social development. The long-term vision of the Maldives was that reducing dependence on fossil fuels could reduce environmental degradation and ensure economic enhancement for its people, and put the country on a sustainable path to development. Encouraged by the initiatives of the Secretary-General to form the United Nations Energy Group, he said he looked forward to receiving support from the international community to make the goal of carbon neutrality by 2020 a success.
Panel 1: Status and prospects: Energy efficiency and new and renewable sources of energy
Timothy E. Wirth, President of the United Nations Foundation and the Better World Fund moderated a panel discussion on energy efficiency and new and renewable sources of energy, comprising: Kandeh Yumkella, Director-General, United Nations Industrial Development Organization (UNIDO); Nebojsa Nakicenovic of Global Energy Assessment; Joe Loper, Senior Vice-President, Policy and Research, Alliance to Save Energy; Leena Srivastava, Executive Director TERI, India; and Sergio Garribba, Adviser on Policy for the Italian Ministry of Economic Development.
Mr. WIRTH said energy efficiency was the “first fuel”. Its importance was reflected in the commitments made by numerous countries towards achieving energy efficiency, such as China, which said it would reduce energy intensity by 20 per cent over 5 years; India, which would meet 10 per cent of its needs from renewable sources by 2012; Brazil, which was already meeting three quarters of its energy needs from renewable sources, beginning in 2007; and South Africa, which would reduce demand by 12 per cent of projected levels by 2015. Achieving widespread energy efficiency hinged on whether States could remove regulatory barriers and create the appropriate financial incentives, perhaps by incorporating such actions into the future Copenhagen framework. It also depended on whether the international community could determine the social cost of carbon, on which it would base a comprehensive, fair and ambitious emissions reduction framework that could be said to be “energy efficient”.
The first panellist, Mr. YUMKELLA referred to energy as “the missing Millennium Development Goal” and said it was time to take action. Although global living conditions had improved in the past few decades, 1.6 billion people still had no access to electricity and 2 billion used biomass as fuel for cooking and heating. In terms of climate change, there must be widespread cooperation on the energy front if global action was to be effective. Since the growth in energy use in the next few decades was likely to be concentrated largely in developing countries, for whom expanding “energy access” and combating “energy poverty” were top priorities, the international community should make the effort to ensure political buy-in from those countries. It must pursue options with multiple benefits ‑‑ reduced cost, better working conditions, and reduced environmental impacts.
Examining the energy problem from the climate perspective was important, but not sufficient, he said. Responsible energy use implied the need for an energy technology revolution. New technologies could de-carbonize the transportation sector, among other things. The success of such ideas depended on a supportive public policy environment, a clear understanding of the costs involved, and an attitude of “technology learning”.
He noted that the United Nations Secretary-General had decided to strengthen the Organization’s involvement on energy issues by creating the United Nations Energy Group, consisting of 20 agencies and programmes of which Mr. Yumkella was Chair. Work on energy access, would be led by the United Nations Development Programme (UNDP), the Department of Economic and Social Affairs and the World Bank; on energy efficiency, by UNIDO, the International Energy Agency (IEA); and on renewable energy by the United Nations Environment Programme (UNEP) and the Food and Agriculture Organization (FAO). Work on normative issues would be conducted in partnership with the International Standards Organization, the IEA and the Renewable Energy Action project.
He said other work would focus on technology transfer and financing, such as creating a one-stop shop for financial tools already available under the United Nations; coordinating and augmenting existing infrastructure to build capacity in developing countries; and ensuring coherence in the United Nations Climate Change Convention, and linking the Millennium Development Goals with the issue of energy access. Just yesterday, the Secretary-General had convened a high-level advisory group on energy, during which it reviewed the energy dimension of climate change, poverty reduction and economic growth. While the energy issue was widely seen as central to climate change negotiations, it was not yet seen as central to other major problems, such as the food crisis, poverty reduction and modernizing national economies. It was time that the United Nations family took a closer look at energy as an issue in its own right, and not as an appendage to other concerns.
Mr. NAKICENOVIC said Global Energy Assessment had worked for two years to take stock of knowledge on energy issues, and one of its main findings was that the world needed a paradigm shift in thinking about energy. There needed to be a radical improvement in existing technology, and diffusion of new technology, that could produce greater efficiencies, or that could reduce the effect of carbon on the environment, such as through carbon capture technologies. Those technologies needed to be deployed globally, with the support of national Governments.
He described various examples of new technology, such as photovoltaic cells used to capture solar energy, which in one instance had the effect of reducing cost by 30 per cent while doubling the power-producing capacity in areas that used them. By enacting the policies to encourage the widespread use of such technology, States could bring energy costs down in a sustainable way. Global Energy Assessment had developed scenarios for the IPCC to illustrate the consequences of various trade-offs, which showed that the level of investment required to reduce carbon emissions to a tolerable level while using conventional fossil fuels, and reducing those emission by changing over to renewable resources was of the same order of magnitude ‑‑ a fourfold increase in investment compared to today’s levels. But, sticking to business as usual would result in a rise in temperature of 4.5 degrees by 2030, which was unsustainable.
He said the IEA had estimated that investment might fall by 38 per cent in the wake of the economic slowdown. As such, green development strategies needed to be directed towards renewable energy, to avoid the consequences of not having enough investment. Historically, spending on research and development had declined in Organisation for Economic Cooperation and Development (OECD) countries after the first energy crisis, staying constant at $10 billion over the last decade. That figure was supplemented by $40 billion in private investment. Those amounts were not commensurate with the challenge currently facing the world.
Mr. LOPER provided an overview of the drive towards energy efficiency in the United States, saying that energy efficiency was “here” and “available”. The example of the United States showed that realizing the potential of existing energy efficiency technologies depended largely on the State’s willingness to enact the right policies. Compared to the past, there was “lots going on” in domestic United States policy in energy efficiency and climate change, such as the use of compact fluorescent lamps, insulation of homes, weatherization, turning off lights, use of hybrid electric vehicles, “right-sizing” (in which people forgo huge cars or houses when appropriate), and so on. If the United States had not begun taking advantage of such advances over the last 35 years, the country would now likely be consuming half again as much energy as it was now. About 40 per cent of energy saved was derived from energy efficiency.
He said economic growth was the biggest factor in determining how much energy was consumed, and thus how much investment should be put into achieving energy efficiency. Energy prices were also a factor. Nevertheless, even with the “right” carbon pricing, there was still much uncertainty about the costs of future energy, and thus the cost of efficiency investments ‑‑ this was known as a “market barrier”. Also, tenants tended to pay energy bills while landlords made the investment ‑‑ the mismatch in user and payer could affect the efficacy of policies and act as another market barrier. Technology lock-in could sometimes act as a market barrier; for example, the fluorescent bulb did not fit into the lamp fixture when first introduced.
He explained that pricing policies, such as the cap-and-trade policy now before Congress, were aimed at addressing those barriers. In March, President [Barack] Obama had declared that the reason he was interested in cap-and-trade was because he believed the market made better decisions than did individuals. Mr. Loper said he agreed with that sentiment, but added that markets could not “do it all”. Market barriers required the right policies to address them. However, while the cap-and-trade bill that would soon reach the floor was “pretty aggressive”, improving efficiencies would help yield roughly one third of the emissions reductions under that bill. Indeed, under-investment in energy efficiency would result in a higher cost of abatement than is warranted, and for that reason, he was pushing hard to introduce energy efficiency programmes in the cap-and-trade regime. Aside from determining the right price of carbon, other important issues included subsidized energy, efficiency standards for buildings and equipment, and labelling ‑‑ sometimes called the “low-hanging fruit” in the drive for sustainable energy use.
Ms. SRIVASTAVA offered a preview of findings in a report by the Asian Development Bank on energy use in the Asia-Pacific. Per capita energy consumption was low in that region, making it essential for the Governments of those nations to ensure their energy security. Large parts of the population did not have access to electricity, with a large dependence on biomass in the poorer countries. Because of that, biomass required a fair degree of emphasis, with strategies for better use of that resource. There was also a high level of dependence on coal. And because a large percentage of oil came from the Middle East and West Asia, those countries had a high level of import dependency and were vulnerable to price disruption and fluctuation. In addition, lack of access to modern fuels was one of the causes of poverty.
On the bright side, she said there were plenty of renewable energy resources available in the region, with biomass and solar energy enjoying huge potential. But, related technologies needed to be adopted and scaled up, and several obstacles stood in the way. They included barriers to financing and deployment; the high price of technology; market barriers; and policy barriers. Banks within those countries were hesitant to fund renewable energy projects, because of a perception that renewables were not commercially ready. In turn, the demand for finances was low in these countries. Financial institutions did not have the capacity to make investment decisions, owing to their lack of experience.
She said determining the right energy pricing was one of the most important steps towards energy efficiency and to adopt energy technologies on a large scale. More realistic pricing of conventional energy was also important. One suggestion by the Asian Development Bank was to make the purchase of renewable energy mandatory, and for States to introduce energy efficient technology. Strengthening legal frameworks and capacity-building was critical in both these areas. Improvements were needed in service delivery and price monitoring of energy service companies, as was raising public awareness of energy efficient household equipment such as refrigerators and air conditioners. The United Nations had a role to play in training in policy design, information sharing, helping create frameworks to reduce transaction costs, secure property rights, facilitate funding for research and development, educate countries on the economics of renewable energy and energy efficiency, and so on.
Mr. GARRIBBA said the European Union had committed itself to reducing energy consumption by 20 per cent by 2020, increasing the level of renewables contributing to the primary energy supply by 20 per cent, and reducing carbon emissions by 20 per cent of 1990 levels. It was the first regional group to do so. Investments in those areas had a strong, anti-recession effect; the technology was already available, with the potential to create jobs. The rest of the world could follow by making energy efficiency a top priority. For most countries, the cost of one kilowatt hour was 5 to 10 times less than that of producing it. Low-emission technologies were available for use, as were technologies to create intelligent grid systems, sustainable transport systems and cleaner coal-powered stations. There were an array of low-emission technologies to choose from, and options would soon be available in the future for carbon capture.
He said in Rome in May, a meeting of G-8 energy ministers of 23 countries had discussed what international collaboration was needed for the future. It signed a new international initiative called the International Partnership on Energy Efficiency Cooperation. It was open to all countries and was the first building block of largely international cooperation on a low-carbon energy platform. It would be brought up again in July at a European Union meeting in Italy.
He said the most important element in the shift to a new energy paradigm was a price for carbon that incorporated all the externality costs. There were different approaches towards internalizing those externality costs, such as by creating a carbon tax. However, while an economist might like the idea, how would the precise amount be determined? And who should decide on the amount? Should it change over time? Furthermore, that method of determining the cost of carbon was antithetical to the idea of letting the market determine the price.
The cap-and-trade system was one way for the market to influence the price of carbon, and if enough countries developed a carbon market, it might lead to an international carbon market. Mechanisms such as the Clean Development Mechanism could not work without a universal price for carbon. A universal price for carbon was also needed to help disburse technologies and increase global cooperation. There were proposals to give countries investing in research and development credit in the carbon market, but again, establishing a price for carbon was a prerequisite.
Following the discussion by panellists, several delegates voiced agreement on the importance of energy as a lead item on the development agenda. Many speakers stressed the need to facilitate access by developing countries to new and renewable sources of energy, such as the Under-Secretary for Energy and High Technology from Brazil’s Ministry of External Relations, who said developing countries needed access to those types of technologies, which were required for their development. He also said developing countries should be matched with technologies that suited their needs and interests. For example, flex fuel vehicles ‑‑ designed to run on a blend of gasoline and ethanol ‑‑ had reduced 35 tons of carbon from the atmosphere in Brazil, and were cheaper and more amenable to the Brazilian public than expensive fuel/electric hybrids.
The representative of Belarus said that, in proposing the holding of today’s forum, his Government had wanted the dialogue to be part of a larger process, and it would push for the spread of technology in the interest of development, preventing climate change and achieving other practical results. It hoped to present those ideas in a General Assembly resolution in the fall, along with proposals for a mechanism to ensure broad and fair access to state-of-the-art technology in energy and for establishing a fund to finance technology transfer.
The Minister of Foreign Trade of the United Arab Emirates also made a statement. Other speakers included the representatives of the Czech Republic (speaking on behalf of the European Union), Philippines, Denmark, China, Bolivia, Venezuela, Singapore, Norway, Cuba and Iceland.
Responding to the speakers, Mr. NAKICENOVIC said he found the idea of an international technology fund interesting, because such funding was traditionally hard to find. Mr. GARRIBBA said he was struck by the numerous calls for a governance of the new energy system through the United Nations, which might build upon existing forms of collaboration, such as the international cooperation on low-carbon energy. Mr. LOPER noted countries that did not consume much energy to begin with could not achieve much in energy efficiency. But, they could leapfrog old technologies by installing the most energy-efficient products available in the market from the very start.
Ms. SRIVASTAVA said energy security was a primary objective for many nations and needed to be defined in a wider context. At one time, “energy security” usually referred to import dependency, but was now beginning to encompass concepts such as energy access, which had a human dimension. In conducting research and development, it was important to emphasize the unique challenge of developing countries, and to scale up solutions that were particularly suited for them. Mr. YUMKELLA said the market for energy was primarily between Governments. For instance, because of European Union targets, countries in that regional bloc had created a market for solar energy, by selling solar power to Africa through an undersea cable. The green growth agenda must be inclusive, calling for smarter and greater cooperation and where all technologies must be considered. He expressed hope that the General Assembly would not treat the forum as a one-off event, because one of the keys to fighting poverty was to help developing countries transition to low-carbon production systems.
Panel 2: Meeting the challenge: Investment and policies
The second panel discussion ‑‑ “Meeting the Challenge: Investment and Policies” ‑‑ was moderated by Vijay Vaitheeswaran, correspondent, The Economist. It featured presentations by Steen Gade, Member of Parliament, Denmark; Santiago Seage, Chairman and CEO of Abengoa Solar, Spain; Saio Mouline, Director-General of the Centre Marocain des Energies; Hélène Pelosse, Ministry of Energy, France; Irene Freudenschuss-Reichl, Ambassador and Director-General for Development Cooperation, Ministry of Foreign Affairs, Austria; Tariq Banuri, Director of the Division for Sustainable Development, Commission on Sustainable Development Secretariat, Department of Economic and Social Affairs; and Verle Vandeweerd, Director, Energy and Environment Group, United Nations Development Programme (UNDP).
Launching the panel, Mr. VAITHEESWARAN said the reason delegates had gathered today was to take up a grand challenge. The world was at a crossroads in contemplating its energy future, and there were large challenges ahead: the current energy system was unsustainable, and it was important to examine the links between energy and security, energy and environment, and energy and poverty. Some 1.6 billion people lacked access to modern energy sources, a number that would only increase if the world stuck with its “business as usual” model.
Mr. GADE said the University of Copenhagen had organized an event three months ago centred on the Intergovernmental Panel on Climate Change report, released last year. The conclusion was that climate change was nearing the upper boundary of the IPCC range of predictions, a point laid bare in the fact that sea level had risen one metre this century. There were challenges ahead, but they could be addressed. By way of example, he said that 25 years ago, Denmark was totally dependent on fossil fuels; today, almost 30 per cent came from renewable sources. “Changes can be done if you have policies in place,” he said. Between 1980 and today, Denmark had registered growth of 70 per cent in its economy, coupled with only 4 per cent growth in total energy consumption.
Describing Denmark’s approach, he said the Government had forced energy companies by law to purchase wind electricity at a minimum price, which allowed for the development of a “smart grid”. It also involved local communities and scientific institutions, which had done wind mapping to reduce the risk of placing a windmill in an area that was not feasible. Also, there was a high energy tax for the consumer, which, while it sounded unpopular, had helped to modernize the industry. As a result, there was today no industry-environment battle.
He hoped to see access to electricity and renewable energy high on the international agenda. In the run-up to Copenhagen, there was not enough focus on those two areas ‑‑ targets for renewables would be crucial. He agreed with the proposal to create a Fund for a renewable energy. For their part, developed countries needed to change their old-fashioned ways of producing energy. Nuclear was not modern ‑‑ renewables were the future and societies must adapt. Developing countries could also do their part, notably by having their local grids relay on renewable energy.
Mr. SEAGE said he represented a new generation of companies that believed that renewable energy, energy efficiency and ensuring a sustainable future were the key challenges of the century. It was clear the world needed sustainable energy sources for several reasons: energy independence, emissions and climate change, among them. The challenge was great ‑‑ conventional energy prices would multiply by two- or threefold in the next 10 years. Conventional transport and power prices would only rise. The world needed more power sources.
Describing renewable energy groups, he said intermittent technologies were those that worked when source was available, i.e., wind and solar photovoltaics. Wind technologies were growing rapidly at a reasonable cost and, in some cases, were competitive. Technologies that could produce clean power when needed included biomass, geothermal and concentrated solar power. They were proven technologies. In terms of cost, they would compete with fossil fuel in the next 5 to 10 years, if CO2 was taken into account. What today looked expensive would look reasonable in that time horizon.
As for what to do, he said “it’s obvious that technology matters”. The current investment of $10 billion in research and development did not amount to much. Something had to fundamentally change to avoid seeing higher prices. He argued for more investment in fundamental research and doing what the pharmaceutical industry had done: create research and development centres; ensure that global networks of scientists were working on technologies, and ensure that private entities were working with public institutions. But, technologies also needed to be tested, which in some cases cost hundreds of millions of dollars. Public support for pilot plans was needed. Finally, “early stage technologies” developed after such pilots were often very expensive. Only a few countries were supporting the move from pilot phase to reality, which meant that promising ideas would not make it to market.
He said the wrong answer was to wait until a technology became cheaper. If everyone thought like that, solar energy would still be in the lab. If countries waited for the market to decide which technologies survived, early stage technologies would never become a reality. The world could not live with only one or two renewable technologies. It needed a mix that could be tailored to a country’s resources.
Mr. MOULINE said Morocco had taken a proactive approach to placing energy efficiency and renewable energy as a high priority. Morocco had decided to create a $1 billion fund to back that political will. Recalling that the Secretary-General said that Africa had not benefited from the Clean Development Mechanism, he expressed hope that the Mechanism’s procedures would be reviewed in Copenhagen, as Africa was enduring the greatest impacts of climate change.
On voluntary regulation, he said Morocco had decided to create a new body, as well as apolicy to facilitate carbon financing. Also, if countries were not structurally connected, it was hard to develop. Morocco was connected to Europe, and with Algeria, where it had two connecting lines. He stressed the importance of regional will to develop joint projects, saying that a desire to use renewable energy was linked to a country’s neighbours.
Morocco had registered success with the creation of decentralized rural electrification, which connected 100 previously unconnected households. In the most isolated areas, service needed to be guaranteed. Solar systems, along with local support services that created jobs, were needed. That was the approach taken by Morocco. In terms of wind energy, Morocco had much more to do, but had established regulations linked to the private sector for electricity networks. Private enterprises were investing in wind parks, as there was carbon financing available for that. Among other successes, he cited a solar project in the southern region, and Morocco’s involvement in the Mediterranean Solar Plan.
Finally, he said renewable energy fostered peace, because countries had to work with their neighbours. As renewable energy developed in southern countries, they would no longer be talked of in terms of terrorism, but in terms of renewable energy.
Joining him, Ms. PELOSSE presented the general framework for the Mediterranean Solar Plan, launched in 2008 by the European Union and validated by 43 Heads of State. While the financial crisis had impacted on the Plan, growth had been seen in renewable enterprises ‑‑ particularly for wind and solar energy. Among the goals of the Plan were to have a more balanced relationship between the North and South, substantively cut greenhouse gasses, create a new industry and market in the South, develop a sustainable plan in the South to meet growing local energy demand, and contribute to the energy and climate package, which would allow for energy-related exports to third countries.
She said renewable energy costs were not at the level of “grid parity”, a situation that required financial means to bridge the gap. Among the options were carbon funds, more balanced use of the Clean Development Mechanism, concessional loans and co-financing of projects with the South. The World Bank could also help finance projects. Also, the creation of the Guidelines for Renewable Development in the European Union meant that joint “green” projects could be undertaken. Any projects were eligible: public or private.
Ms. FREUDENSCHUSS-REICHL spoke about the leverage that development cooperation could provide in terms of promoting energy for sustainable development. During the 1990s, a very small percentage of the overall official development assistance had been dedicated to energy and renewable energy. That trend had improved in recent years, and today, there was an understanding in the development community that energy was important. Development policy and cooperation had promoted a general consensus on the role of energy in development, which was confirmed in 2000, reconfirmed at the 2002 Johannesburg Summit and next with the creation of the Interagency Committee on Energy.
In the European Union, energy was anchored firmly in the programme portfolio of the European Commission as of 2005, she said, and that issue continued to evolve. Another important matter was in advocating for poor country needs in the debates on energy security and climate change. Discussion at the highest levels centred on the legitimate desire of developed countries to secure energy for their populations. Energy security was framed in terms of supply security. There was not enough debate about the fact that energy security could not be achieved in isolation.
She said the challenge of providing energy for sustainable development was doing it in a way that alleviated poverty, combated climate change and stabilized the climate system. Development policy and cooperation had supported regional efforts to move forward on energy for sustainable development. By way of example, she said Austria, Finland and the European Commission had undertaken a programme with Central America on energy and the environment, which had enabled several countries to try pilot projects, experiment with energy efficiency and invest in renewables. There was another partnership that had resulted from the Lisbon Summit ‑‑ the Partnership on Energy ‑‑ led by Austria and Germany.
Leveraging private sector development was crucial, and development cooperation could prepare the ground for large projects to unfold, she said. Development cooperation, through the Global Forum for Sustainable Energy, also promoted multi-stakeholder exchanges. Change must occur in developed and developing countries alike, if progress was to be made in energy for sustainable development.
Mr. BANURI said it was useful to think of the world as a single country of 6.5 billion people. The development agenda was unfinished, with 80 per cent of the population living without their basic needs being met. He found inspiration in both the 1987 South Commission Report and the Brundtland Commission, which brought the environment and development agenda together. Since the start of the industrial revolution, inter-country inequality continued to grow until development began. Global inequality today was coming down ‑‑ thanks in part to growth in China and India. Energy had been central to all that growth, as it brought about a massive transformation of the global economy.
Discussing the link between human development and energy, he said more energy did not improve the human development index. Modern energy was too costly. Spending on energy was inversely related to income, and an average 10 cents of every dollar was spent on energy. Energy was too expensive, because energy costs were too high. On average, they were higher for consumers than for businesses. The world must come up with a global strategy that would allow developing countries to “leapfrog” to more modern energy development.
VERLE VANDEVEERD, Director, Energy and Environment Group of the United Nations Development Programme, said developing countries must have greater access to modern energy and the global community should help facilitate their transition to clean energy systems. Four actions were needed, the first of which was agreement on ambitious greenhouse gas emission targets in Copenhagen. Second, developing-country Governments should establish national energy access goals, as 1.6 billion people lacked access to modern energy and 2.5 billion depended on traditional biomass. Third, in Copenhagen, countries must agree on an appropriate mechanism for technology transfer. Developing countries’ access to sustainable options would be critical to speed deployment of renewable technologies. As such, capacity-building support should help them create policies to improve energy access.
She added that UNDP, in cooperation with UNIDO and UNEP was establishing a capacity development facility to tackle such challenges in poor countries. With the United Nations Framework Convention on Climate Change Secretariat, UNDP had launched a technology needs assessment handbook.
In the ensuing discussion, representatives of Member States expressed their hope to see a day when new and existing renewable energy technologies were placed in the public domain. Important in that pursuit was Government support for research and development, and the demonstration of emerging clean energy technologies. Greater international cooperation was also needed to maximize outcomes from such technology. In making that point, Australia’s delegate noted that his Government announced a package of $4.5 billion for solar research and clean coal technology, among other things.
Equally important was the business environment, said New Zealand’s delegate. Technologies for hydropower, geothermal energy and wind were well established in her country. Investment in large-scale renewable energy had been undertaken by companies on a commercial basis, meaning that energy was cost-competitive with fossil fuel. There needed to be a reasonable chance for success before investment could be made.
Senegal’s representative said many countries, including his own, had felt excluded from proposed solutions. The problem in sub-Saharan Africa was that countries had no access to renewable energy technology, mainly because of cost, and it was extremely important that UNDP and the World Bank finance projects at the country level, particularly in East Africa.
Saudi Arabia’s representative pointed out that all forecasts showed energy demand growing between 40 and 50 per cent in the next 50 years, with fossil fuels meeting some 80 per cent of that growth. Calls for enforcing a change to renewable energy sent the wrong signals to markets and energy producers. While many preached about the duty to future generations, what would they say when the world did not meet its energy demand? States had a duty to those 1.6 billion people who currently lacked energy access.
Other speakers were from India, Iran, Ecuador, Tajikistan, Thailand (on behalf of Association of South-East Asian Nations (ASEAN)), Indonesia, Algeria, Japan, Argentina, Georgia, Nigeria, Libya, Chile, Egypt, and the Dominican Republic.
A representative of the International Union for Conservation of Nature and Natural Resources (IUCN) also spoke.
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