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Net-Zero: UN Report on the energy transition

In 2015, the United Nations General Assembly set up the 17 Sustainable Development Goals to be reached by 2030. According to the UN these goals should be implemented to increase global prosperity and equality. They include, among others, the elimination of poverty, hunger, and inequality. In 2021, the UN released a theme report on the clean energy transition as a preparatory document for the High-level Dialogue on Energy in New York, stating the goals, recommendations, and challenges connected to the energy transition.


SDG 7 - clean and affordable energy for the global community - is particularly important since this goal is at the core of most other development aims and virtually all SDGs link back to economic growth, for which massive amounts of energy is required. Clean and carbon neutral energy will be central to the sustainability of this growth.


This article is part of a two-part series which will summarize the report and highlight the major points and themes. In this first article, I will explain the goals and recommendations in the report. This should paint a clear picture of what the International Renewable Energy Agency (IRENA) and United Nations Environment Program (UNEP) want the global community to achieve by 2030. IRENA is the first intergovernmental agency only focused on renewable energy and serves as an advocate and hub for innovation in the energy sector. UNEP is a UN program setting goals and environmental standards for the global community. These recommendations are broken down into different issues, remedies, and actors involved. The second part of the series will focus on the challenges and actions that need to be addressed in order to reach net-zero emission from energy production. This will hopefully offer a big picture view of the energy transition and its challenges.


In general, there are three major themes that dominate this UN theme report: Investment, innovation, and cooperation. Most of the recommended actions and concrete plans relate to these in some way. The report talks about job creation, increasing energy efficiency, and international development cooperation, all of which are connected to the over-arching idea of economic development. The report presents the clean energy transition and economic development as two synergetic goals that do not interfere with each other. This claim seems especially tenuous.


Even if one accepts the claim that investment in renewable energy sources is a net benefit for job creation, these newly created jobs are of a very different profile than the lost jobs in the fossil fuel industry. Most of the time these jobs will require different and more advanced skills than traditional jobs in energy. The report does mention that retraining efforts are central to the energy transition but fails to make suggestions that are concrete. Another unanswered question is where these new jobs will be created. It is likely that many of these new jobs will be added in advanced economies. Many developing economies on the other hand employ lots of people in the fossil fuel industry. It is not clear how this is compatible with other SDGs such as SDG 8.5 - productive employment and decent work for men and women.


Priority Recommendations


During the Covid-19 Pandemic, the United Nations and its various agencies formulated 12 recommendations for the various actors of the global community. The first 3 recommendations focus on renewable energy, energy efficiency and infrastructure respectively. In all these categories, UN wants to see more investment and more ambitious targets set by governments. The following recommendation are particularly noteworthy:

  • OECD countries should phase out coal by 2030 (recommendation 4).

  • Stimulus during the COVID-19 crisis should fuel structural, more permanent change to energy policy (recommendation 5).

  • The focus should be on creating international energy markets and setting long term decarbonization goals (recommendation 6-8).

  • The importance of shifting transportation to renewable energy sources, job creation in the energy sector, and guaranteeing an inclusive transition to clean energy, involving as many stakeholders, actors, and sectors as possible (recommendations 9-11).

Building on these recommendations, the report mentions the interlinkages with other sustainable development goals, such as decent work and economic growth (SDG 8), reducing inequality (SDG 10), or sustainable cities and communities (SDG 11).


While the report mentions inclusivity as a central point to the energy transition. It is not clear how this is supposed to be accomplished. Shifting personal and public transportation to renewable energy sources might be feasible in developed countries but seems relatively far away in countries that lack the necessary infrastructure and industrial expertise. Interlinked aims such as economic growth and reduced inequality are also questionable. It is not made clear how renewable energy sources are inherently more equitable than fossil fuels. The report simply states that the energy transition should be compatible with the development goal of reducing global inequality. It does not present a detailed description of how this can be achieved. Many of the countries with the most fossil fuel resources are among the least economically diversified (Fig. 1 ). Economies that are highly dependent on the export of oil and natural gas would struggle if the entire world economy were to switch to renewable energy sources. The UN report does not contain enough information about how the energy transition can reduce inequality between Global North & South Countries or within countries. More concrete plans need to be developed to make sure SDG7 and SDG10 are synergetic.


Key Results of The Report


The Transition Report presents three key results alongside actions to be undertaken by stakeholders as well as a timeline of goals to achieve. While these actions and goals are intriguing (p. 5-6), I will focus on the following desired results:

Priority Action Areas

  1. Establish simple regulatory frameworks to incentivize private investment in clean energy

  2. Incubate green innovation and rapidly deploy technologies for renewable energy

  3. Establishing International cooperation on the energy transition

Stakeholder Actions

Private stakeholders:

  • are advised to contribute to the formation of regulatory frameworks and align investments in energy with SDG 7 and decarbonization.

  • should divest and stop operations in non-renewable energies and increase R&D of renewables.

  • Collaborate with other key stakeholders to decarbonize the industry by sharing best practices and building coalitions.

Public stakeholders:

  • are advised to adopt internal policies across govt. agencies to streamline cross-sectoral policy, regulatory frameworks and NDC targets.

  • are recommended to increase investments in sustainable infrastructure and nascent technologies as well as enabling policies for public-private partnerships

  • Engage with other international actors and support regional development

Civil Societies and Communities:

  • Join in on govt. led consultation sessions with other actors

  • Advocate for clean energy and nature-based solutions

  • Promote energy efficient actions to adopt more efficient habits, i.e. public transport, household energy usage, appliances, etc.

  • Push for govt. accountability and product transparency through labeling

International Institutions:

  • are advised to share data and analyses as well as collaborate across sectors to assist with development strategy.

  • Scale up capacity-building and technical assistance efforts for developing countries

  • enhance observation and measurement systems

  • provide a platform for global and regional action

Milestones (selection)

  • reach an annual energy efficiency increase of 3%, achieve 100 million jobs in energy (60% in renewables) and have targets to transition to 100% renewable energy by 2030.

  • share of fossil fuels in global energy supply should be 30% (currently at 60%) and commercialize alternatives to rare earth metals by 2030

  • By 2030, all countries should have clear a decarbonization strategy for 2050

  • By 2050, coal is fully phased out of the global energy mix

The key elements of the plan summarized above are very concrete and straight forward. It explains the steps that should be taken at each stage of the energy transition. It rightly mentions how important it is to involve both public and private actors in the transition. However, the report fails to show how private actors can be incentivized to transition faster. Private actors are supposed to align their investments with SDG7 but it is not explained how or why they would do so out of self-interest.


Rationale for the Green Energy Transition


There are many benefits from transitioning to clean energy, such as economic development, job creation, and healthier societies. Fossil fuels are the primary source of of greenhouse gas emissions (GHG), making them the main driver of climate change. This report states that energy is responsible for 2/3 of greenhouse gas emissions. However, it is not made clear what is included in that calculation, i.e. transport, electricity, industry. Fig. 2 shows a possible breakdown of these emissions which gives an idea of the decarbonization challenge for each industry.


Fig. 2 - Our World in Data (Hannah Ritchie)

In the scope of the climate crisis, switching to renewables is vital to avoid further climate catastrophe and increased fragility. The economic cost from climate disasters can be seriously damaging as seen by the flooding in Pakistan. To this end, the report makes clear that governments must lead the way with the private actors to implement these changes.


The rationale states that clean energy is the foundation for other sustainable development goals. Electrification is an obvious and efficient way to remove fossil fuels from transportation for example. Electric cars are much more efficient than combustion engines. But this will also increase demand for clean electricity, along with the electrification of populations that currently do not have access to electricity. Another concern is the fact that developing countries will need a lot more time to reach these goals and therefore need support from industrialized nations. Investment in infrastructure and technology are essential for electrifying an economy.


Contextualizing the Push for Renewable Energy


The report presents several figures that demonstrate how clean energy is on the rise, but availability and adoption needs to pick up the pace, to make a more significant impact. Governments have pledged USD 100 trillion to energy systems investments over the next three decades. However, yearly energy efficiency gains have also not been satisfactory at just 1%. Other areas of improvement include the creation of regional power grids and phasing out of coal power plants.


The report was writing prior to the invasion of Ukraine and did not anticipate rising energy prices. The current oil and gas shortage due to the war in Ukraine and sanctions on Russia has caused a new surge in coal energy. Rising energy prices are pushing governments to secure cheaper energy which will undoubtedly benefit browner alternatives in the present. Current energy prices and national energy dependence could favor the development of national, regional or supranational renewable energy projects for resiliency against energy shocks.


Another vital aspect of the transition to renewables is finance. Without enough financial backing many development ideas and innovations will not get off the ground. The report states that there is a trend of large investors and hedge funds moving away from fossil fuel assets. This includes BlackRock, the world's largest assets manager, who has decided to take greenhouse gas emissions into account for its investment strategy. Other private actors are also making commitments to net-zero, such as automobile manufacturers that plan to fully switch to electric vehicles. Both Mercedes and Volkswagen plan to end their production of combustion engines by 2030.


Job creation is brought up as a final point in this chapter. The report claims that the same amount of investment in renewable energy can create three times more jobs than in traditional fossil fuel sectors. This however comes with a caveat, since many of these newly created jobs require different skills than their fossil fuel counterparts. This question will be further discussed in the second part of this article series, which covers challenges and actions related to reaching SDG7.


Overall, most of these goals and actions outlined in this matrix are feasible with achieving net-zero. However, some of them require a lot more explanation as to how they can be effectively implemented. Especially for issues where private actors are expected to be major drivers of change. Incentivizing private investment effectively can be difficult in high risk markets, such as less developed economies.


Writer: Max Suter


References

  • Theme report on energy transition - towards the achievement of SDG 7 and net-zero emissions, High-level Dialogue on Energy - New York (2021)

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