Transition Of Funds To Renewable Energy: Setting Directives For The Future

Burning fossil fuels is one of the major causes of climate change throughout the world (NASA, 2018). As communities across the planet are being affected by the devastating impacts of climate change, it has become essential to transition funds from fossil-fuel projects to the renewables. This is relevant because what the governments are deciding right now will reverberate through their country’s policy for years to come. In effect, setting the directives for renewable energy for the future generations has become very important with large-scale global implications.

According to the International Renewable Energy Agency (IRENA), “The energy transition is a pathway towards the transformation of the global energy sector from fossil-based to zero-carbon by the second half of this century.” (IRENA, 2018a) The energy transition has seen remarkable progress in the past few years.

With 161 gigawatts (GW) of newly installed renewable power capacity added in the year 2016, renewable energy has found astounding growth. Modern renewables were accounted for approximately 10% of the global total final energy consumption (TFEC) in 2016 (REN 21, 2017). By 2050, wind and solar technology could account for almost 50% of total electricity globally. The number will rise up to 71% if we count hydro, nuclear and other renewables (Bloomberg, 2018). This is a very interesting development as solar power and energy efficiency can together reduce a family’s energy bill by over 70 percent (RETI, 2018). World leaders are finally realizing that Renewable energy has the power to change the lives of millions with high energy burdens.

The investment in the renewables also has grown significantly. Since 2004, Global Cumulative Investment in the Renewables totaled USD 2.9 trillion (IRENA, IEA, & REN 21, 2018). In 2017 alone, the investment was estimated at USD 279.8 billion, almost all which was in solar PV (57%) and wind power (38%) (REN 21, 2017). These investments resulted in the creation of 500,000 new jobs globally in 2017. Currently, the total number of people employed in the renewable energy sector has exceeded 10 million (IRENA, 2018b). This number will essentially be doubled by 2050 with over 11 million additional jobs (IRENA, 2018a). Last year, investments in new renewable power capacity overtook the amount invested in fossil fuel generating capacity. Interestingly, developing and emerging countries have already surpassed industrialized countries in renewable energy investments (IRENA et al., 2018).

This is a positive development since the Paris Agreement in 2015 where Parties promised to keep the global temperature rise below 2°C above pre-industrial levels (UNFCCC, 2018). But, regrettably, this development isn’t distributed evenly among all the countries. For example, countries like Bangladesh with dwindling natural gas reserve has turned to fossil-fuel (e.g. Coal) for energy generation, despite it being very suitable for mass solar energy production (Azim, 2018). In contrast, corporate sourcing of renewable electricity has spread rapidly across countries like Burkina Faso, Chile, China, Egypt, Ghana, India, Japan, Mexico, Namibia, and Thailand. The wide dispersion of the trend indicates to a role other than “geography” at play. The government is taking an active and conscious role in the promulgation and promotion of renewable energy. But moving towards fund transitions by leaving a large number of countries behind can’t give us a sustainable solution.

In a recently published report on “Renewable Energy Policies in a Time of Transition”, a focus on end-use sectors was emphasized, other than just renewable power generation. The report also pointed out the need for greater policy attention in the use of renewables. It can be focused on dedicated targets, technology mandates, financial incentives, generation-based incentives, and carbon or energy taxes. All in all, the report pointed out that without holistic policies that consider factors beyond the energy sector itself, energy transition can’t be achieved (IRENA et al., 2018).  In this crucial time when some governments are following through their commitments of The Paris Agreement and some are deflecting from the desired path of Sustainable Energy Solutions, we have to set the narrative and directions, before it’s too late.  This is the time in history where we will look back and either be proud or remorseful of our choice on global energy transition.

Bibliography:

Azim, M. S. (2018). Energy crisis: The case for renewables. Retrieved September 2, 2018, from http://thefinancialexpress.com.bd/views/energy-crisis-the-case-for-renewables-1533742114

Bloomberg. (2018). New Energy Outlook 2018 | Bloomberg New Energy Finance | Bloomberg Finance LP. Retrieved September 2, 2018, from https://about.bnef.com/new-energy-outlook/

IRENA. (2018a). Energy Transition. Retrieved September 2, 2018, from http://www.irena.org/energytransition

IRENA. (2018b). Renewable-Energy-Jobs-Reach-10-Million-Worl dwide-in-2017. Retrieved from http://www.irena.org/newsroom/pressreleases/2018/May/Renewable-Energy-Jobs-Reach-10-Million-Worl%0Adwide-in-2017

IRENA, IEA, & REN 21. (2018). Renewable Energy Policies in a Time of Transition. Retrieved from www.irena.org

NASA. (2018). Global Climate Change Causes. Retrieved from https://climate.nasa.gov/causes/

REN 21. (2017). Global Overview: Global Status Report 2017. Retrieved September 2, 2018, from http://www.ren21.net/gsr-2018/chapters/chapter_01/chapter_01/

RETI. (2018). Solar Energy Creating New Pathways. Retrieved September 2, 2018, from http://www.retiset.org/blog/solar-creating-new-pathways

UNFCCC. (2018). What is the Paris Agreement? Retrieved September 2, 2018, from https://unfccc.int/process-and-meetings/the-paris-agreement/what-is-the-paris-agreement

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