NEWS: Research to explore benefits of – and options for – green energy policies
Countries that opt for green growth recognise that they need a new way of doing business. New research by the Clingendael Institute, and funded by CDKN, will provide recommendations to decision-makers in Kenya, Indonesia and Colombia on strategies to make a green growth transition, with a special emphasis on the energy sector.
Green growth policies normally focus on meeting economic growth targets in ways that reduce dependence on polluting fossil fuels and scarce natural resources, protect the environment and meet social goals. In the vast majority of countries – least developed and industrialised countries alike – how homes and businesses get their energy is a pivotal and centrally interlinked to climate issues, since around 60% of green house gas emissions come from the energy sector. Taking a more sustainable path requires a fast transition to low-carbon forms of energy.
Restructuring a country’s energy supply away from polluting sources, like coal and oil or unsustainable fuelwood, has many benefits – ranging from improved public health to reduced traffic congestion and increased economic productivity (these ‘co-benefits’ are well documented by the IPCC’s Fifth Assessment Report). Energy security can also be a big advantage of green energy policies: moving towards renewable energy (which is almost always domestically sourced) can reduce a country’s dependency on imported fossil fuels, which suffer from high and volatile prices.
The transition to a green economy is also fraught with political sensitivities for any government. As CDKN’s Executive Chairman Simon Maxwell has written, you need a transition plan: “All policies have winners and losers…in the short term, the number and geographical distribution of potential losers makes it extremely tricky to design policy” (see How to win the argument on climate change).
Government support for green growth may open new business and employment opportunities and cost savings for consumers. It can also involve removing subsidies and price supports for polluting technologies and wasteful practices – and these can affect the various groups’ economic interests.
Clingendael and the Energy Research Centre of the Netherlands, along with partners in each focal country; Oxford Policy Management in Indonesia, ClimateCare in Kenya and an independent consultant in Colombia, will explore how green growth can contribute to improved energy security and development in each country – and how policy choices can create the incentives for diverse groups to embrace a green economy. Input from local institutes will assist in the cultivation of domestic debate about green growth options, as well as how to manage the winners and losers.
The three focus countries all have high projected rates of economic growth in the coming years. The question is, how can this growth be powered sustainably?
Kenya has huge potential in solar and geothermal power, but needs to create the business environment for this sector to prosper. Colombia, on the other hand, has ambitions for climate compatible development but is still highly reliant on energy exports, which currently make up around 8% of its gross domestic product (GDP). Indonesia has recently carved an opportunity out of historically low global oil prices by ending government subsidies for domestic fossil fuel consumption and could influence others to do the same.
Louise van Schaik from Clingendael said, “it’s about showing those in power and with links to fossil fuels that green growth is not political suicide. We will aim to identify political interests linked to the energy sector by carrying out an energy security analysis. This will require interacting with key political stakeholders, including political elites. This will allow us to identify which green growth strategies are economically and politically feasible.”
The researchers will compare green energy pathways to business as usual scenarios to develop a tool for identifying, framing, and communicating the benefits to green growth. They will identify the specific vested interests linked to the energy sector in these countries, and others that could benefit from the transition, so to make the transition more politically palatable for all. “We want to identify the actors who can be the voice of change, to plant the seeds for the uptake of green growth,” Dr van Schaik added.
The project involves representatives from relevant parts of government in Colombia, Indonesia and Kenya from the start, and the analysis will inform identification of practical policy options for robust green growth trajectories for each country. Dr van Schaik explained, “we hope that the decision takers in these countries, as well as possible donors who want to make smart development investments, will embrace the options we identify, feel ownership over them, and be able to turn them into a reality.”