New UN brief calls for urgent energy-related measures for long-term sustainable development
Rising energy prices are severely impacting our world, pricing out many developing countries and setting back decades worth of progress. As with most global challenges, the most vulnerable populations are hit the hardest. The continuing crisis has significantly impacted clean energy development as well as progress being made on energy access and the clean energy transition. We are now in the middle of a long and uncertain period of energy politics, with serious implications for energy choices – both today and in the future.
The 3rd Brief of the Global Crisis Response Group, launched by UN Secretary General today, highlights the severity of the current challenges in the energy sector and makes short- and medium-term recommendations to respond and systemically address current and chronic challenges.
As governments continue to face immense pressure from the once-in-a-generation cost of living crisis, the United Nations is calling for energy policy measures that link the need for urgency and long-term sustainable development.
“This third brief lays out steps to address the global energy crisis. It recognizes the urgent need to address key ecosystem issues towards creating a more supportive environment for scaling-up renewable energy deployment, including the challenge posed to progress on SDG7 by the low disbursement of committed development finance,” says Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All and Co-Chair of UN-Energy, as well as the co-lead of the energy workstream of the UN Global Crisis Response Group.
Here are five key takeaways from the Brief:
Accelerate renewable energy: There are significant obstacles in the renewable energy supply chain that hinder the pace and scale of the clean energy transition. The world needs to double down on the use of renewable energy sources to achieve net-zero, tackle energy poverty and boost and diversify the global energy mix. In the short-term, we must focus on demand management in developed countries to help bring down the aggregate demand and plan for winter without further increases in prices.
Efficient use of resources: In the medium-term, we must focus on reducing gas leakages. An estimated USD 90 billion in revenue could be earned by reducing natural gas flaring and methane leaks along the energy supply chain. By prioritizing combating energy waste, policymakers and producers can affect a quicker reaction to the current crisis than by scaling up new exploration and production.
Invigorate committed concessional capital: Investments disbursed by the World Bank, the Asian Development Bank and the African Development Bank remain below 35 percent of commitments made. While the constraints vary by region, sector, and project, of the USD 36.3 billion committed since 2020, only USD 12.8 billion has been disbursed. This is a key constraint in creating the necessary enabling infrastructure, as well as advancing blended finance options to create a more supportive investment environment for private investment in clean energy. The green energy transition requires restructuring of public, private and multilateral finance to generate the required investment.
Leverage carbon pricing: Carbon markets are gaining traction as a crucial way of channeling finance to developing countries for clean energy use and carbon reductions. Government must employ effective carbon pricing which can take the form of progressive taxation, such as carbon, green, and fuel excise taxes. Developing countries will need significant support to achieve such transformations.
Scale up financing: Clean energy investments in emerging and developing economies declined to less than USD 150 billion in 2020, with only a slight rebound in 2021. About 70 percent of additional energy investments must occur in emerging economies in which finance is limited and capital remains more costly than in advanced economies. Sustainable debt markets can play an important role in bridging this funding gap and should be tapped to finance renewable energy sources, energy access and energy-efficiency technologies.
While there are significant obstacles, global collaboration towards accelerating the use of renewables through effective policies, finance mechanisms, and technology transfer will push us closer to our goals of ending energy poverty and achieving net-zero emissions.
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