Increasing the share of renewable energy in all economic sectors is, as highlighted in the Green Economy Report, vital to address many of the challenges posed to the global community and, in particular, developing countries. These include:
• Energy security: a growing population and rising incomes will further increase energy demand and prices and at the same time the dependence on a limited range of suppliers, in particular for oil.
• Climate change: the Intergovernmental Panel on Climate Change (IPCC)’s fourth assessment report underlined the importance of mitigating human-induced climate change – mostly driven by the combustion of fossil fuels – and adapting to the changes that occur. Substantial damages will occur even with a rapid greening of the energy system, but will be much higher if no action is taken. The impacts of climate change are already resulting in economic losses around the world. Activities to adapt to the impacts of climate change also come with a range of costs, many of which will be borne by developing countries. Furthermore, climate change is likely to disproportionately affect the poor.
• Impacts on health and ecosystems: increased indoor air pollution, as well as detrimental impacts on global biodiversity and ecosystems are on the rise. This includes problems such as deforestation, decreased water quality and availability and increased introduction of hazardous substances into the biosphere.
• Energy poverty: currently 1.3 billion people – one in five globally – lack electricity to light their homes or conduct business. Twice that number – nearly 40 per cent of the world’s population – rely on wood, coal, charcoal, or animal waste to cook their food. Breathing in toxic smoke that causes lung disease and kills nearly two million people a year, most of them women and children. Ensuring universal access to modern energy services is one of the three objectives of the Sustainable Energy for All initiative.
Doubling the share of renewable energy in the energy mix (from 15 to 30 per cent) by 2030, and reducing global projected electricity consumption by buildings and industry (energy efficiency) by 14per cent, constitute the other two objectives of the Sustainable Energy for All initiative. Accessible technologies like solar water heaters, solar pasteurisers, wind pumps, improved cooking stoves, biomass briquettes and biogas, all have the potential to make a significant impact in securing modern energy services for the poor in developing countries. Adoption of these technologies will help reduce the carbon intensity of growth.
Furthermore, the expansion of renewable energy can enable developing countries to gain a competitive edge by avoiding what the developed world is facing today: existing unsustainable energy infrastructures and processes which must, over time, be replaced, with all the costs that this will entail. Trade can play a significant role in the greening of the energy sector. For example, as noted in the Rio+20 outcome document, international trade plays an important role in the transfer of environmentally friendly technologies.
Green trade opportunities in the energy sector include the following: (i) exports of raw materials or components for renewable energy supply (RES) products, or of finished RES products (e.g. solar panels and wind turbines); (ii) exports of energy produced from renewable resources that is carried by electricity grids to be consumed in another country; (iii) exports of renewable fuels (e.g. biofuels and hydrogen); and (iv) carbon crediting on international markets.
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