COLUMN-CO2 emission limits and economic development: Kemp

PUBLISHED: Fri, 16 Apr 2021 15:38:03 GMT
Share

(John Kemp is a Reuters market analyst. The views expressed are his own)

* Chart: https://tmsnrt.rs/2Qv2Pgq

By John Kemp

LONDON, April 16 (Reuters) – For policymakers in North America and Western Europe, energy policy is often viewed exclusively through the lens of climate change, which takes priority over everything else.

But for their counterparts in developing countries, where energy is still scare and expensive, and other social problems are pressing, it is only one of a number of competing objectives.

“Taking action to combat climate change” is one of the 17 high-level sustainable development goals agreed by members of the United Nations in 2015, with a target delivery date of 2030.

Others include poverty reduction; improvements in healthcare and nutrition; access to clean energy, water and sanitation; creating better employment; and reducing inequality (https://sdgs.un.org/).

For policymakers in advanced economies, combating climate change tends to take lexical priority over all these other objectives, but their counterparts in the developing world must take a more balanced approach.

Lexical priority is just a fancy way of saying “dictionary order”. In the dictionary, all the words beginning with A come before all the entries starting with B.

For many Western policymakers, reducing carbon dioxide (CO2 ) emissions takes precedence over all other aspects of energy policy, but prioritisation is more complicated for policymakers from developing economies.

ENERGY DIVIDE

Differences in access to energy and energy consumption between the advanced and developing economies remain stark (https://tmsnrt.rs/2Qv2Pgq).

Per capita energy consumption in the OECD economies is more three times higher than in non-OECD countries according to BP (“Statistical review of world energy”, 2019).

Per capita consumption in the European Union is one-third higher than in China, five times higher than in India and almost nine times higher than in Africa.

Similarly, per capita consumption in the United States is three times higher than China, 11 times higher than India and 19 times higher than Africa.

Some differences can be attributed to geography; energy consumption tends to be greater in countries at high latitudes that need more heating. But much of the gap reflects differences in comfort and consumption.

Residents of advanced economies enjoy more heating, cooling and lighting services; travel further and more frequently, for pleasure as well as work; and consume more energy embedded in goods and services.

If they are to achieve the other 16 sustainable development goals and increase their incomes and living standards, residents of developing economies will also need to consume more energy.

In many ways, the economic development process has always been about capturing and employing increasing amounts of energy.

The process of economic and social development in the OECD economies during the 19th and 20th centuries was very energy intensive, and it is likely to be the same for non-OECD economies in the 21st century.

While the demand for energy has levelled off in the advanced economies recently, it is still increasing rapidly in developing economies as they catch up.

Per capita energy consumption in the OECD economies fell slightly by 0.2% per year between 2009 and 2019, but in non-OECD economies it rose at a compound annual rate of 1.8%.

UNMET NEEDS

The enormous scale of unmet energy demand in developing countries poses a huge challenge for attempts to control carbon dioxide emissions.

Zero-emission energy sources must be scaled up by several orders of magnitude to replace existing fossil fuel combustion and satisfy the growth in energy demand implied by the development process.

Furthermore, the population of developing countries is still growing fast, and is projected to continue increasing through the next three decades, which will boost energy consumption even more.

The population of middle-income and low-income countries has risen by 2.2 billion since 1990, and is projected to rise by another 1.9 billion by 2050 (“World population prospects”, United Nations, 2019).

In 2019, zero-emission energy sources met only one-sixth of global energy consumption, with the remainder met by fossil fuels, most of which would eventually need to be replaced to achieve the net-zero emissions target.

By 2050, global energy consumption is likely to increase by another 25-75%, based on trends over the last decade, all of which increase would need to be satisfied from zero emissions sources to achieve the net zero target.

From an advanced economy perspective, the emissions problem is largely a static one, replacing existing fossil fuel combustion with zero-emission sources.

For developing countries, it is dynamic, replacing existing fossil fuels while also adding enough extra zero-emission sources to meet burgeoning growth in energy demand.

CLIMATE AMBITION

In the run up to the 26th United Nations climate conference in November, top policymakers from North America and Western Europe have emphasised the need to set an ambitious strategy to reach net zero by 2050.

But the rhetorical priority on reducing emissions can often sound like a call to put climate change ahead of other development goals, postponing solutions to other problems until climate change has been tackled.

In reality, that sounds selfish, unfair, and politically impractical to many policymakers from developing countries, who must be sensitive to other objectives as well.

If the conference is to succeed in setting ambitious and credible goals for emissions reduction, it must demonstrate how they can be integrated with other development objectives.

Reducing CO2 emissions must go hand in hand with increasing energy consumption in middle and low-income countries, boosting their social and economic development, rather than becoming a substitute for it.

Related columns:

– Asia and the great reconvergence (Reuters, April 13)

– Global CO2 emissions far off net-zero trajectory (Reuters, April 12)

– Electricity access and climate change (Reuters, Dec. 15, 2019) (Editing by David Evans)

(c) Copyright Thomson Reuters 2021. Click For Restrictions – https://agency.reuters.com/en/copyright.html

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.