How much is each country’s fair share when it comes to reducing carbon emissions or increasing the share of renewable energy in the energy mix? All governments have committed to these two important goals as part of the Paris Agreement on climate change and the UN Sustainable Development Goal on affordable and clean energy (‘SDG 7’). But each country will ultimately decide what, when and how to contribute.
The fact that the Paris Agreement’s temperature goals and the SDGs are global and aspirational can easily result in free-riding. Three emitters, China, the EU and the US, generate more than half of total greenhouse gas emissions. Four countries, China, the US, Brazil and Canada, produce more than half of total renewable energy generated in the world. Smaller emitters and countries with different natural resource endowments could easily conclude that their contribution to emission reductions or clean energy is not as important.
However, there are important moral and economic reasons for every country to take action. A safe climate is a common good, and ensuring that everyone can have access to clean and affordable energy is a shared responsibility. The costs of postponing the necessary emission reductions will increase significantly over time, as countries will need to resort to costly and untested negative emissions technologies and expensive adaptation measures. For fossil fuel producers, decreasing oil export dependence and increasing the share of clean energy domestically are important strategies for economic competitiveness in the net zero-emissions economy that the second half of this century will require.
This week, at the UAE-based Clean Energy Business Council’s Mena Clean Energy Summit in Dubai, participants explored changes in policy, regulation and financing that are needed to scale up renewable energy in the region. In global policy, I argued, the answer is simple: we need higher clean energy targets, from all countries. And the good news is these are not only needed but they are possible and are in countries’ self-interest.
Last year, the International Renewable Energy Agency (Irena) published two important studies regarding the role of renewable energy in global climate action. One found that energy efficiency and renewables can deliver up to 90 per cent of the emissions reductions required by 2050 for decarbonising the global energy system. Presently, two-thirds of greenhouse gas emissions are generated from energy production and use. Renewable energy could deliver half of the reductions needed to keep the world well below the safe limit of 2°C of global warming.
The second Irena study found that countries have been rather modest when telling the world about their renewable energy plans. Two-thirds of all countries see renewable energy as a key element of their national emission reduction strategies and almost half have communicated a renewable energy target as part of their national plans submitted to the Paris Agreement. However, these renewable energy targets are often less ambitious than national plans and much lower than present-day cost-effective potential of renewable energy.
Renewable energy targets
Take for example the Paris Agreement plans of Middle Eastern countries, which together would add 13GW of renewable energy capacity in the region by 2030. This may seem like an important addition, as in 2016 the installed renewables capacity in the region totalled 16GW, of which approximately 0.3GW was in the GCC countries. However, if one looks at current plans in the region, it becomes clear that events are overtaking these internationally-enshrined targets. Saudi Arabia alone is set to expand its renewable energy capacity to 9.5GW by 2023.
Irena has calculated that countries could comfortably set international renewable energy targets that put us collectively on a below 2°C trajectory if they incorporated existing national targets and also took into account recent technological advances and declining costs. But why are international targets so important? And why should countries raise their targets now?
Renewable energy targets, like any policy target, provide long-term signals and certainty for markets. In the case of the Paris Agreement on climate change, however countries’ targets have two further crucial roles.
First, the credibility and success of the Paris Agreement requires the highest possible collective ambition. Because the agreement is based on a bottom-up system whereby each country submits plans it considers to be its best possible contribution, the agreement incorporates a mechanism that calculates how much these add up to and how far they still are from what is required by science. The agreement also includes a mechanism that encourages countries to regularly raise their level of ‘ambition’, be it emission reductions or climate finance. These two ‘ambition mechanisms’, which both operate in five-year cycles, are what the success of the Paris Agreement will be tested by.
The next big test will be in 2020 when a large number of countries, including from the GCC region, are expected to submit their revised, voluntary contributions to the agreement, which must be more ambitious than the first ones, submitted in 2015. All countries are also expected, by 2020, to present their ‘long-term low greenhouse gas emission development strategies’. The Paris Agreement will only succeed if it manages, in 2020, to send a clear signal to investors that countries are determined to raise collective ambition, and this can only happen through more ambitious targets. Second, communicating ambitious targets at the international level comes with little risk, as countries can present a part of their contribution as conditional, be it on other countries taking equally ambitious action or on the provision support. By doing so, developing countries will also be able to communicate their technology, capacity building and financing needs and related opportunities to investors.
Internationally-communicated renewable or clean energy targets are not something to be feared. For countries, they present opportunities to send signals to markets and investors. For the world, higher targets allow for unleashing the collective ambition that is required for keeping the planet safe and our societies prosperous.
Dr Mari Luomi is Senior Research Fellow at the Emirates Diplomatic Academy.