As the world’s energy and commerce ministers come out of the Clean Energy Ministerial in Vancouver this month, there's a good-news-bad-news message they need to hear. Bad news first: Both heat-trapping carbon dioxide emissions and energy consumption hit global record highs last year, according to the International Energy Agency and the U.S. Department of Energy.
The good news: The shift to clean, lower-emissions energy is not only possible, but it can also be profitable, starting with the relatively low-hanging fruit of the move toward energy efficiency. To encourage this shift, leaders need to focus on three initials: R&D&D.
R&D is research and development, of course. But to activate R&D, the second D — deployment — is essential. And for deployment, governments and businesses need to work in concert to create incentives for clean energy innovation to avoid locking in high-carbon infrastructure.
Globally, we stand to gain $26 trillion in economic benefit by investing in low-carbon growth between now and 2030, rather than continuing with the outmoded 20th century, fossil-fueled model.
Change is rarely easy, especially when the old way of doing things is as entrenched as oil, gas and coal are. Over the last decade, in the wake of the Great Recession that began in 2008, there was hope that the world had decoupled energy from carbon and was ready to ramp up solar, wind and other renewable power.
Clean energy is now indeed a power source of choice in many sectors, with investment in renewables outstripping that of coal. But it’s time to examine the oil and gas sector, which still has not made much progress. So energy ministers must determine which policy levers will be most effective in moving their respective countries forward and then double down on their efforts to craft these policies.
Even in the United States, where the Trump administration has had a negative response to changes in the energy mix, there are signs that the shift we need is possible. Congress has rejected the current administration’s efforts to scale back the Energy Department’s science funding, continuing to pay for the popular ARPA-E program that funds and develops advanced energy technologies. Other programs have taken a hit, but U.S. lawmakers have generally supported energy innovation, including programs that would help tackle climate change.
The moment is ripe for investment in clean energy. In the power sector, priorities for R&D&D include: switching to higher-efficiency, lower-emission steam turbines; advances in bulk energy storage; reducing the cost of long-distance power transmission; developing offshore and high-altitude wind power, and taking advantage of ultra-low-cost solar photovoltaics that could drive costs down to as little as 10 to 20 cents per watt, making it up to 80 percent cheaper than current technologies.
Comparable energy R&D&D advances are possible in transportation, buildings and industrial processes, enabling technologies and in deriving economic value from captured carbon dioxide.
The first item on the agenda should be a close look at existing energy efficiency policies, focusing on opportunities to raise standards for efficiency of equipment, including tax treatment and financial mechanisms that can speed deployment. Next up is a concentration on the range of investments needed to support and deploy more renewable energy, clean technology and lower-carbon fuels.
Beyond R&D&D, there’s C: commercialization. For clean energy to flourish, it must be shown to be commercially viable, and for that to happen, government leaders need to engage the private sector to ensure that businesses have the energy they require for manufacturing and that the transition pathway to a lower-carbon economy is clear.
This is no small task, even with the strong support shown by more than 500 companies that have signed onto the Science Based Targets initiative, agreeing to set targets for their operations that are rooted in science aimed at limiting global temperature rise to well below 2 degrees C (3.6 degrees F).
Analyses by the Energy Transitions Commission offer guidance on how to move forward, outlining ways to achieve net-zero carbon emissions in hard-to-abate sectors including cement, steel, plastics, trucking, shipping and aviation. Together, these industries represent 30 percent of energy emissions today, a share that could increase to 60 percent by midcentury as other sectors lower their emissions.
National energy ministers are a key part of the solution, but they can’t do it alone. It is crucial for those that gathered in Vancouver to work with their counterparts in ministries of commerce and industry — along with business leaders — to determine the best incentives to change private-sector behavior.
As a baseline, most companies would prefer to upgrade to energy-efficient equipment, but they defer these investments because capital is scarce. Tax treatments or financial resources that encourage upgrading equipment could alter that narrative. At its core, this is a practical problem with practical solutions. We know what needs to happen in terms of changes in the private and public spheres to avoid hazardous temperature rise that could spur the most severe effects of a changing climate.
With the momentum of the Clean Energy Ministerial meeting behind us, now is the ideal time to start setting those changes in motion.
Jennifer Layke is director of the energy program at the World Resources Institute.