The international community is serious about addressing energy poverty, if a recent draft of the United Nation’s new, central development agenda is anything to go by.
As part of the UN’s process to create a follow-up to the Millennium Development Goals (MDG), the General Assembly’s Open Working Group on Sustainable Development Goals (SDG) released an initial “zero” draft of new targets.
While there is much negotiation among UN member states about precise metrics, the initial draft is revelatory in the strength of its commitment to clean energy and climate goals. Eleven of the goals explicitly reference clean energy or climate change-related progress.
While they may not all end up being adopted by the international community as MDG follow-ons, they are worth considering for their ambition and the potential difficulties in their execution.
The centerpiece of the draft agenda is a commitment to universal access to sustainable and modern energy.
Energy poverty remains a serious roadblock to poverty reduction. According to the World Bank, 1.3 billion people are without electricity, and nearly 40 percent of the world’s population use “dirty” energy for heating or cooking (wood or charcoal, for example). As expected, the vast majority live in the developing world, particularly Asia and sub-Saharan Africa.
Unfortunately, achieving this goal in a truly sustainable way is a heavy lift. According to a recent report from the International Energy Agency, the world needs an addition $400 billion per year in energy investments just to catch-up with projected demand (a cumulative total of $48 trillion from now until 2035). Much of that investment undoubtedly would need to be directed to fossil fuel investments (the IEA estimates about $23 trillion over that period).
That is disappointing news for the sustainable aspect of these development goals. The SDG draft calls for a doubling of the amount of renewables (solar, wind, hydro) in the global energy mix by 2030.
While the global deployment of renewables has been impressively aggressive over the past two decades, that goal is similarly difficult. Renewables penetration is about 19 percent currently, and the U.S. Energy Information Administration projects it will only be 23 percent in 2035, absent a radical change in global policy (a climate agreement that calls for binding cuts, for example).
Replacing fossil fuels
Perhaps the best (and, relatedly, most politically difficult) goal, and the one that could further push the previous two goals, is the phasing out of fossil fuel subsidies.
While ostensibly designed to help the poor, the end-result of these subsidies is often problematic. In 2013, the International Monetary Fund published a study on the global use of energy subsidies; they found they impose “substantial fiscal and economic costs in most regions.”
When factoring in negative externalities (for example, the immediate and long-term costs of pollution), they cost the world nearly $2 trillion a year. The subsidies distort the proper working of markets, and are less efficient than other kinds of financial transfers to the poor. Unfortunately, they have very powerful constituencies defending them (the fossil fuel companies). A commitment to wind these subsidies down, and shift the money to renewables and other low-carbon energy sources, would be a signal achievement in the climate and energy fight.
Many of the initial Millennium Development Goals were thought to be near-impossible to achieve. With one-and-half years left, however, some of them have been met. (Remarkably, the extreme poverty and access to drinking water goals were met five years ahead of time.)
Others still remain distant, and that will likely be the case for many of these goals. Yet, at this stage it is important to remember that aggressive progress on any of them would improve the livelihoods of millions.