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Developing Countries Lead Global Shift to Green Energy

A vegetable vendor in Bangalore using a solar lamp to light her stall. Credit: SELCO/IPS

A vegetable vendor in Bangalore using a solar lamp to light her stall. Credit: SELCO/IPS

UXBRIDGE, Canada, Jun 13 2013 (IPS) - Emerging economies such as Mexico and India are shifting energy investments into renewable resources while industrialised countries hesitate, noted two new United Nations reports released Wednesday in Nairobi, Kenya.

“There is a structural change in the global energy sector underway,” said Ulf Moslener, head of research of the Frankfurt School in Germany.

“Costs are dropping radically. Renewables represented 6.5 percent of all electricity generated and reduced carbon emissions by 1 billion tonnes in 2012,” said Moslener, co-author of Global Trends in Renewable Energy Investment 2013, a report sponsored by the U.N. Environment Programme (UNEP).

Developing countries are finding installing green energy to be far less expensive than relying on fossil fuels, Moslener told IPS. Poorer countries want to reap the benefits of stable energy costs, new jobs, improved air quality and reduced health and climate damage.

While political debates about the future of green energy preoccupy countries such as the United States, United Kingdom and Germany, developing countries have embraced cleaner energy. The move is reflected by a narrowing investment gap. In 2012, developing countries invested 112 billion dollars in clean energy, compared to developed economies’ 132 billion dollars.

"Around the world, there is a shift to clean energy."
-- Michael Liebreich

In 2007, developed economies’ investments were two-and-a-half times greater (excluding large hydro) than those of developing economies.

Globally, despite a 12 percent decline in investment, more renewable energy went online in 2012 than in any previous year, the main reason being a 30 to 40 percent drop in the cost of solar energy.

“Around the world, there is a shift to clean energy,” said Michael Liebreich, chief executive of Bloomberg New Energy Finance.

Political complications

Investors understand that clean energy no longer costs more than fossil energy. As such, there is a lot of excitement about the potential of large-scale projects in wide range of countries.

Nevertheless, investments in clean energy in 2013 would have been higher had governments in Europe and North America not abruptly pulled back from green energy policies.

“No industry has been treated as badly as the clean energy sector, particularly in Europe,” Liebreich said in an interview.

Frequent and sometimes wholesale changes in renewable energy policies create market uncertainty, he said, so investors hold back, waiting for clarity and stability.

Such changes are being driven by polarised politics and a fact-free debate about future energy choices, particularly in the United Kingdom, United States, Australia and Canada. These countries are going to be five years behind the shift to low-cost, clean energy, he said.

Liebreich highlighted Canada’s obsession with its tar sands as good example of a government’s failure to comprehend that future economic success will be based on clean energy sources. “They are not serving the public interest,” he said.

New energy records

In 2012, China, the United States, Germany, Japan and Italy were the top five investors in renewables. Globally, solar photovoltaic installations reached a record 30.5 gigawatts (GW), while installed wind installations topped off at 48.4 GW – both new records, according the REN21 Renewables 2013 Global Status Report.

In the wake of the Fukushima nuclear accident, Japan is shifting from a nuclear-dependent energy policy and investing significantly in solar, geothermal and wind power.

In the Indian state of Gujarat, a 605 MW photovoltaic solar park, completed in April 2012, is expected to save about 8 million tonnes of carbon dioxide per year. An amount of nearly 1 billion dollars was announced to go towards a 396MW wind project in Oaxaca State, Mexico.

“More and more countries are set to take the renewable energy stage,” said Achim Steiner, UNEP executive director. “Only last week the global host of World Environment Day, Mongolia, invited me to tour its first 50-megawatt wind farm.”

Mongolia has ambitious plans to harness wind and sun to power its future and supply clean energy to China and the region, Steiner said in a press conference in Nairobi.

“Like many other nations, it has seen the logic and the rationale of embracing a green development path,” he added.

A growing industry

An estimated 5.7 million people worldwide worked directly or indirectly in the renewable energy sector in 2012. The bulk of these jobs were in Brazil, China, India, members of the European Union, and the United States, with employment rising in other countries.

Selling, installing and maintaining small solar panels in rural Bangladesh, for example, employs 150,000 people directly and indirectly.

The transition from brown to green energy is gaining momentum as more countries, regions and cities realise that the shift is in their best economic interests, offering energy security, among other benefits.

Even the currently stalled U.N. climate talks won’t slow this shift, said Steiner, and a strong global climate treaty in 2015 could spur an increase in investment.

“The financial sector has factored in the glacial pace of the U.N. climate talks. Nothing that happens in that forum will reduce investment now,” said Liebreich.

 
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