IEA Executive Director Maria van der Hoeven discusses how Energy efficiency and renewable energy technologies will play a vital role in the transition to a secure and sustainable energy future
Energy efficiency and renewable energy technologies will play a vital role in the transition to the secure and sustainable energy future that we seek.
This transition entails challenges for policymakers, but experience shows us time and again that unlocking the power of private sector investment is the only way to achieve the sustainability goals that societies demand. Cooperation between government and business is key to recognising what works and what does not, to learning from our experiences, and to following the right path to optimal technology deployment.
At the International Energy Agency, energy security sits at the core of our mandate, and that is precisely why we recognise that sustainability is such a prized goal. An efficient and low carbon energy system reduces reliance on energy supply for economic growth, mitigates threats to energy security coming from climate change, and reduces the global economy’s exposure to disruptions in fossil fuel supply.
The question then is: How to achieve a transition to greater deployment of clean technologies and energy efficiency?
Improving energy efficiency is not always easy – good governance capacities (including legislative frameworks, funding mechanisms, institutional arrangements and coordination mechanisms) are needed to support implementation of energy efficiency strategies, policies and programmes.
Coordination mechanisms, such as targets and evaluation also influence the quality and effectiveness of energy efficiency policy outcomes. The IEA has developed 25 energy efficiency policy recommendations which are regularly updated in order to help countries achieve energy efficiency savings in the transport, buildings, industry and power sector, at little or no cost.
The other key driver in the transition to a low-carbon economy will be technology and innovation. Technological change and development will significantly enhance the portfolio of options available, and over time will bring down the cost of achieving global climate change goals. Governments have an important role in this context. They can help by creating an attractive environment for research, development and demonstration (RD&D), and by safeguarding the drivers of innovation. Well-designed and targeted technology policies on both the supply and demand sides are a fundamental ingredient to accelerate innovation.
The difficulty industry faces in fully appropriating the benefits of R&D represents one of the main justifications for government support of R&D. Low-carbon energy R&D typically requires long-term horizons, while most of industry’s focus is on incremental improvements, which are more certain. Innovations in clean energy technologies often have very high capital requirements, with substantial economic, technical, and regulatory risks that hamper access to finance. Plus, due to the ‘public good’ nature of reducing CO2 emissions, demand for certain low-carbon technologies is low, and companies have little incentive to invest in clean energy RD&D.
Public policy can play an important role in addressing market failures and the disconnect between supply and demand of appropriate innovations by inserting environmental sustainability into the research system. Government intervention with targeted technology policies will be key to encouraging greater private sector investment in low carbon energy technologies.
In both the cases of efficiency and technology, then, policy is a key driver. Yet, climate change is clearly one of the most difficult challenges faced by the energy sector, now, and for the decades to come. The response so far has been broadly inadequate. In 2010, the world added more CO2 to the atmosphere than ever before. Especially in difficult economic times, policy makers can lose sight of the pressing need to move forward.
What then, is the role of international climate change negotiations and meetings like COP18? The kind of local, regional and national policies which can do so much to improve energy efficiency and the role of clean energy technology are not dealt with by such negotiations. And yet, gatherings like COP can help on several fronts.
First, they set the tone for the global effort and remind everyone, both policy-makers and publics alike, of the clear and present danger of climate change. Second, they can establish basic rules for the credible reporting of countries’ actions to reduce greenhouse gases, and ensure that all are moving in the right direction. Good news stories, like the rapid expansion and development of renewable energy, must be reconciled with the fact that the additional capacity of coal-based power generation dwarves those carbon improvements. Under the UN Framework Convention on Climate Change, countries need to give a full and fair picture of what is really happening. Only then will we take the measure of efforts we need to make.
This transition entails challenges for policymakers, but experience shows us time and again that unlocking the power of private sector investment is the only way to achieve the sustainability goals that societies demand. Cooperation between government and business is key to recognising what works and what does not, to learning from our experiences, and to following the right path to optimal technology deployment.
At the International Energy Agency, energy security sits at the core of our mandate, and that is precisely why we recognise that sustainability is such a prized goal. An efficient and low carbon energy system reduces reliance on energy supply for economic growth, mitigates threats to energy security coming from climate change, and reduces the global economy’s exposure to disruptions in fossil fuel supply.
The question then is: How to achieve a transition to greater deployment of clean technologies and energy efficiency?
Improving energy efficiency is not always easy – good governance capacities (including legislative frameworks, funding mechanisms, institutional arrangements and coordination mechanisms) are needed to support implementation of energy efficiency strategies, policies and programmes.
Coordination mechanisms, such as targets and evaluation also influence the quality and effectiveness of energy efficiency policy outcomes. The IEA has developed 25 energy efficiency policy recommendations which are regularly updated in order to help countries achieve energy efficiency savings in the transport, buildings, industry and power sector, at little or no cost.
The other key driver in the transition to a low-carbon economy will be technology and innovation. Technological change and development will significantly enhance the portfolio of options available, and over time will bring down the cost of achieving global climate change goals. Governments have an important role in this context. They can help by creating an attractive environment for research, development and demonstration (RD&D), and by safeguarding the drivers of innovation. Well-designed and targeted technology policies on both the supply and demand sides are a fundamental ingredient to accelerate innovation.
The difficulty industry faces in fully appropriating the benefits of R&D represents one of the main justifications for government support of R&D. Low-carbon energy R&D typically requires long-term horizons, while most of industry’s focus is on incremental improvements, which are more certain. Innovations in clean energy technologies often have very high capital requirements, with substantial economic, technical, and regulatory risks that hamper access to finance. Plus, due to the ‘public good’ nature of reducing CO2 emissions, demand for certain low-carbon technologies is low, and companies have little incentive to invest in clean energy RD&D.
Public policy can play an important role in addressing market failures and the disconnect between supply and demand of appropriate innovations by inserting environmental sustainability into the research system. Government intervention with targeted technology policies will be key to encouraging greater private sector investment in low carbon energy technologies.
In both the cases of efficiency and technology, then, policy is a key driver. Yet, climate change is clearly one of the most difficult challenges faced by the energy sector, now, and for the decades to come. The response so far has been broadly inadequate. In 2010, the world added more CO2 to the atmosphere than ever before. Especially in difficult economic times, policy makers can lose sight of the pressing need to move forward.
What then, is the role of international climate change negotiations and meetings like COP18? The kind of local, regional and national policies which can do so much to improve energy efficiency and the role of clean energy technology are not dealt with by such negotiations. And yet, gatherings like COP can help on several fronts.
First, they set the tone for the global effort and remind everyone, both policy-makers and publics alike, of the clear and present danger of climate change. Second, they can establish basic rules for the credible reporting of countries’ actions to reduce greenhouse gases, and ensure that all are moving in the right direction. Good news stories, like the rapid expansion and development of renewable energy, must be reconciled with the fact that the additional capacity of coal-based power generation dwarves those carbon improvements. Under the UN Framework Convention on Climate Change, countries need to give a full and fair picture of what is really happening. Only then will we take the measure of efforts we need to make.
If political will can be maintained, then the right policies can be pursued in each country to improve energy efficiency and pursue low-carbon technologies in close concert with the private sector. That path will, in turn, bring us closer to a sustainable energy trajectory, and one which is, in the end, more secure for our economic future.
This is an edited version of an article published on the IEA website on 26 November 2012.The full version can be found following the link below: http://www.iea.org/newsroomandevents/news/2012/november/name,33801,en.html
This article appears courtesy of Planet B Magazine
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