The pathway for conversion to a renewable energy future has been pioneered by Denmark and a few other visionary nations. But a global transition to renewable energy requires a focus on the developing world, where 80–90 percent of the growth in energy demand will occur in coming decades.1 To meet global deadlines on emissions reduction, achieving a renewable energy future will also require an accelerated diffusion strategy.
In 2009, the United Nations’ Division for Sustainable Development published a Big Push strategy proposal for rapidly reducing the global price of renewable energy through large-scale, front-loaded investments channeled through a globally coordinated feed-in tariff. Built on the economic analyses of the United Nations’ World Economic and Social Survey 2009, as well as best available current research on how quickly the technology could be deployed, the plan demonstrated how renewable energy could become the default investment choice in a ten- to 20-year time frame.2
The historical models for this strategy are the U.S. government’s program of guaranteed purchase of microchips in the 1960s and the Green Revolution’s combination of technology diffusion, policy change, and extension programs. By focusing large-scale investment in renewables in the developing world, the United Nations believes that the pace and cost of development will be transformed through the enormous economies of scale involved. For example, more than 1.6 billion people currently lack modern electricity of any kind. Meeting those needs with solar, wind, and other renewables would help the global market for renewables advance much more rapidly.
Several other important benefits would also be realized:
- Renewable energy would become affordable in those areas most in need of energy services.
- Energy access—and all the social and economic benefits that come with it—would be improved for the world’s poorest people (the target price is U.S.$0.03–0.05 per kilowatt-hour).
- The realization of environmental benefits such as reduced greenhouse gas emissions and pollution would be accelerated.
While the up-front investment cost of achieving these benefits is significant, the expected returns are equally large. Initial estimates suggest that an investment of U.S.$1–1.5 trillion—front-loaded, spread over ten to 20 years, and distributed through feed-in tariff mechanisms managed by individual countries—would be adequate to drop the price of renewables to the target affordability rate noted above. While this investment is a large amount, it represents ten to 15 years of the U.S.$100 billion per year committed at the 2009 Copenhagen climate summit—or two years of U.S. defense spending.
The argument for large-scale investment in renewable energy access for the developing world is further supported by the results of a 2009 UN global economic modeling study. The model—which assumes an increase of public spending on renewable energy at a rate of 1–5 percent of GDP (depending on the region), as well as ambitious government action and a reduction of global trade barriers—suggests that a global strategy roughly along these lines would result in an increase in per capita income in every region of the world, compared to a business-as-usual scenario.
The United Nations’ Big Push strategy also includes technical support and capacity-building elements. Although endorsed by a wide range of leading experts in climate and energy (including H. J. Schellnhuber, Johan Rockström, Sunita Narain, Thomas B. Johansson, and Nebojsa Nakicenovic, among others), the strategy was not picked up for serious discussion either at the 2009 Copenhagen climate talks or in Cancún in 2010. But the concept of a global feed-in tariff has been pushed forward at the level of the UN secretary-general’s Advisory Group on Energy and Climate Change, with analytical support from Deutsche Bank.3
The Big Push remains a viable policy option; the window for implementing it remains wide open and is getting wider. Feed-in tariff mechanisms have become a standard instrument of energy policy around the world. The logic of increase-the-scale/reduce-the-price continues to be demonstrated year by year in the world’s renewable energy markets (though the not-fast-enough pace of change also confirms the need for acceleration). Similarly, the need for clean energy services makes a clear case for such a Big Push strategy—as do the several case studies demonstrating that when those clean energy needs are met, both human lives and natural environments are dramatically improved.
- U.S. Energy Information Administration. International Energy Outlook 2010 [online] (July 2010). www.eia.gov/oiaf/ieo.
- UN Department of Economic and Social Affairs. A Global Green New Deal for Climate, Energy, and Development [online] (December 2009). www.un.org/esa/dsd/resources/res_pdfs/publications/sdt_cc/cc_global_gree....
- DB Climate Change Advisors/Deutsche Bank Group. GET FiT Program: Global Energy Transfer Feed-In Tariffs for Developing Countries [online] (April 2010). www.dbadvisors.com/globalResearch/global_research_articles_3529.jsp.