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Mitigating climate change impacts
through sustainable development solutions
Thomas B. Johansson
Energy and Atmosphere Programme,
United Nations Development Programme
Gail V. Karlsson
Environmental Lawyer and Consultant
Abstract
Energy is central to the current international discussions about climate change
because it is the human activity that contributes most to the buildup of greenhouse
gases in the atmosphere. It is also a critical element of national plans for economic
and social development among the poorer countries of the world that currently lack
su≤cient energy to power modern cities, industries and transportation systems.
Transformation of the world’s energy systems to promote energy e≤ciency,
increased use of renewable energy resources and cleaner conventional energy use
can promote overall economic and social development while at the same time
e≠ectively addressing the threats of climate change. E≠orts to control greenhouse
gas emissions can go hand in hand with measures to address the needs of
developing countries for increased energy services. Focusing on the positive aspects
of environmentally sustainable development will be more e≠ective in building
support for climate change mitigation than a strategy that primarily emphasizes
the need for limiting worldwide emissions. Increased energy e≤ciency, adoption of
renewable sources of energy, and cleaner use of conventional fuels are the most
promising options for providing the level of energy services needed in the
developing world, while at the same time limiting energy-related greenhouse gas
emissions.
Introduction: What are the environmental, social,
and economic threats presented by climate change?
The potential impacts of climate change include increased frequency of extreme
weather events like drought, floods, and intense storms; rising sea levels; melting
of glaciers and the Arctic ice cap; and disruption of a wide range of natural ecosystems. Such environmental changes will likely cause adverse social and economic
consequences, affecting agriculture and food production, forestry, fisheries, freshwater resources, and human health.
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The large percentage of the world’s population living near coastal areas will
become increasingly vulnerable to storm damage and infrastructure loss. Sea level
rise due to warming of ocean waters and melting of glaciers could cause extensive
coastal flooding, forcing large population migrations and elimination of entire
cultures in low-lying areas. Dry areas will be prone to increased desertification,
and whole forests could disappear as temperature zones shift much faster than
forests can naturally migrate. Reduced water supplies in arid regions could provoke international conflicts, while food shortages tend to destabilize shaky governments. Direct health effects could include deaths from intense heat waves as
well as widespread transmission of infectious diseases like malaria and yellow
fever, which are currently confined to tropical areas.
Some of the poorest developing countries will be especially vulnerable to the
adverse impacts of climate change on agricultural production, water supplies, and
the natural ecosystems on which they rely for basic necessities. Many of these
Increased energy efficiency, adoption of renewable sources of energy, and cleaner
use of conventional fuels are the most promising options for providing the level
of energy services needed in the developing world, while at the same time limiting energy-related greenhouse gas emissions.
countries are located in regions that are already subject to heat waves, drought,
desertification, deforestation, flooding, tropical diseases, and natural disasters, as
well as poverty and lack of infrastructure. Some of the low-lying Pacific islands are
likely to become almost completely inundated by rising sea levels. Yet, for the most
part, these countries have not obtained the benefits of the industrialization that
led to interference with the climate system. Moreover, they generally have the least
financial and planning resources available to undertake mitigation measures to
protect against long-range environmental threats.
Most of the scientific research on climate change has been compiled and analyzed by the Intergovernmental Panel on Climate Change, a group of over 2,000
scientists organized in 1988 by the United Nations Environment Programme and
the World Meteorological Organization. Their first report confirmed the seriousness of the problem and provided the scientific basis for the UN Framework Convention on Climate Change. Their second report, published in 1996, concluded
that there is discernible human influence on the climate system that is magnifying
the natural greenhouse effect. Efforts to avert these threats will require a reduction
in emissions of carbon dioxide, methane, nitrous oxide, and other greenhouse
gases generated by human activities.
Surface temperatures on the earth have increased over the last century, particularly during the last decade. If current trends remain unchanged, greenhouse gas
emissions will continue to rise substantially during the next century. In order to
stabilize greenhouse gas concentrations, it will be necessary to reduce emissions
below present levels. Moreover, since carbon dioxide and some of the other greenhouse gases accumulate and remain in the atmosphere for many decades, the challenge of dealing with climate change will last for many generations.
Much emphasis has been placed on the perceived economic costs of addressing
climate change. Yet it is important to recognize that policies designed to establish
sustainable energy systems can both promote sustainable economic and social
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development and at the same time mitigate the impacts of climate change. The
benefits of poverty reduction, improved human health, and better local and
regional environmental conditions provide strong incentives for adopting sustainable energy policies, even without considering climate change factors.
What are the sources of anthropogenic greenhouse gases?
The bulk of human emissions of major greenhouse gases come from the energy
sector, primarily as a result of burning fossil fuels (coal, oil, and natural gas) to provide electrical power, heat, transportation, and energy for industrial production
processes. Carbon dioxide is by far the most significant of the greenhouse gases, and
over 80% of the carbon dioxide added to the atmosphere by human activities can be
attributed to the use of fossil fuels.1 Methane and nitrous oxides are other important
greenhouse gases released, in part, from the use of fossil fuels. Outside the energy
sector, there are several other potentially significant greenhouse gases, including
hydrofluorocarbons, perfluorocarbons, and sulfur hexachloride, which are used for
refrigeration and air conditioning as well as industrial purposes. The impacts of
these gases are small today, but could become more extensive over the long term.
Carbon dioxide is emitted from many natural sources, particularly from the
decay of organic materials. But these sources are generally balanced by natural
“sinks” that absorb carbon dioxide. Most importantly, new plants take up carbon
dioxide as they grow. Overall, huge amounts of carbon are exchanged yearly
among the oceans, the atmosphere, and land vegetation. Human activities, including combustion of fossil fuels as well as land-use changes and agriculture, add
carbon dioxide to the atmosphere in amounts that exceed the absorption capacity
of existing natural sinks. This extra carbon dioxide accumulates in the atmosphere
from year to year and reduces the amount of heat radiated from the earth’s surface
into space, trapping more heat in the lower levels of the earth’s atmosphere.
Land clearance for agricultural purposes is a major factor affecting the release
of carbon dioxide into the atmosphere and the decrease in carbon dioxide absorption by natural sinks. Globally, land use changes account for close to 20% of the
Much emphasis has been placed on the perceived economic costs of addressing
climate change. Yet it is important to recognize that policies designed to establish sustainable energy systems can both promote sustainable economic and
social development and at the same time mitigate the impacts of climate change.
The benefits of poverty reduction, improved human health, and better local and
regional environmental conditions provide strong incentives for adopting sustainable energy policies, even without considering climate change factors.
carbon dioxide emissions caused by human activities. Expansion of cultivated
lands has generally come at the expense of forests and woodlands, which have
greater absorption capacities. Many of these croplands have subsequently been
degraded due to unsustainable land management practices that cause loss of topsoil, wind and water erosion, and salinity. In addition, large-scale deforestation is
accelerated by commercial timber harvesting, industrial and mining operations in
forest areas, and construction of roads and highways through wooded lands.
It is the continued reliance on fossil fuels for energy production, however, that
is the main element in projected greenhouse gas emission increases in the future.
1 All statistics quoted are
derived from the documents
cited in the Reference Material
section at the end of this article.
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Stabilization of carbon dioxide concentrations in the atmosphere will require substantial changes in the world’s energy systems and technologies in order to reduce
future emission rates. The primary challenge in addressing the long-term impacts
of climate change will be to find ways to provide necessary energy services without at the same time increasing greenhouse gas accumulations in the atmosphere.
Are there reasons besides the threat of climate
change to consider changes in energy systems?
In many parts of the world, limitations on the availability of energy services create
barriers to socioeconomic development. Increased access to energy is needed in
order to promote income generating activities, educational advancement, availability of health services, and greater opportunities for women.
Worldwide, more than 1.5 billion people lack electricity and approximately two
billion people use traditional solid fuels like firewood or dung for heating and
cooking purposes. The considerable amount of time and physical energy spent by
women and children in gathering fuel and carrying it over long distances reduces
their ability to engage in other social, economic, and educational activities. In addition, unvented wood and dung fires contribute to indoor air pollution and respiratory health problems. Acute respiratory infections are the leading cause of death
for young children worldwide, accounting for over 2 million deaths annually.
Because of high capital investment requirements and the need for extensive
transmission and distribution lines, there are many countries where it has simply
not been possible to meet the energy needs of rural populations using conventional
large-scale, fossil fuel-based power plants. Limited economic opportunities in these
rural areas encourage migrations to already overcrowded urban areas. Meeting the
energy needs of rural communities through increased availability of small-scale
non-polluting energy technologies can raise living standards in these areas and also
mitigate climate change impacts and other local environmental threats.
Besides contributing to climate change, combustion of fossil fuels produces
smog, ground-level ozone, particulates, and other forms of local air pollution that
Although industrialized countries are currently responsible for more than twothirds of annual greenhouse gas emissions, by 2025 developing countries are
likely to account for two-thirds of annual emissions, unless they pursue a different energy path. Cumulative emissions by developing countries, however, would
not catch up to those of industrialized countries for approximately another one
hundred years. Since it is the buildup of greenhouse gases in the atmosphere that
causes climate change, a country’s cumulative emissions are a better indicator of
its level of responsibility than its annual emission rate.
are directly harmful to human health. Burning fossil fuels also produces emissions
of sulfur and nitrogen oxides that form acid rain, which can damage sensitive
forests and lakes, even far away from the source of pollution. Coal mining and oil
drilling damage fragile land and water ecosystems, while oil spills are a continuing
threat to surface waters, coastlines, and groundwater aquifers.
In addition to environmental and health concerns, energy supply issues may
also play a major role in geo-political tensions and international security matters.
Since major supplies of fossil fuels are concentrated in relatively few areas, efforts
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to control and exploit these resources have led to political crises and military conflicts. Countries without domestic supplies are subject to energy security threats
due to their dependence on foreign producers. Some poor countries spend large
amounts of money on imported fuels, reducing the availability of foreign
exchange for other essential domestic investments, and adding to unsustainable
debt accumulation.
Because other sources of energy, like wind, sunlight, rivers, and crop residues
are more widely distributed, using them as alternatives to fossil fuels can reduce
energy dependence. Marketing, distribution, and servicing of these new energy
technologies can provide new economic opportunities for local entrepreneurs as
well as international corporations.
Why do developing countries and industrialized countries
tend to have different perspectives on climate change?
In general, developing countries are more concerned with immediate and pressing domestic issues such as providing for economic development, employment,
public health, safe food and drinking water, sanitation, and transportation.
Poverty is their overriding concern. About 1.3 billion people in developing countries live on less than U.S.$1 per day.
In many developing countries, the financial costs of providing electricity
through extensions of the grid to currently unserved regions are prohibitive.
Moreover, they are facing the prospect of rapidly growing populations. Consequently, these countries are concerned that climate change mitigation plans could
substantially increase their energy supply costs, or place limits on their ability to
provide energy for development.
In international climate change negotiations, developing countries have
argued that because industrialized countries are responsible for over 75% of
greenhouse gas accumulations, they should also take the lead on emissions reductions. (Carbon dioxide emissions can remain in the atmosphere for up to one hundred years.) Historically, it was the industrialized countries that produced the
majority of greenhouse gas emissions that have now accumulated in the atmosphere. They also generated sufficient wealth from their industrialized economies
to be able to afford to undertake environmental protection measures. Many of the
industrialized countries have, in fact, accepted the challenge from the developing
countries and are working within the terms of the UN Framework Convention on
Climate Change and the Kyoto Protocol to reduce their greenhouse gas emissions.
Although industrialized countries are currently responsible for more than twothirds of annual greenhouse gas emissions, by 2025 developing countries are likely
to account for two-thirds of annual emissions, unless they pursue a different
energy path. Cumulative emissions by developing countries, however, would not
catch up to those of industrialized countries for approximately another one hundred years. Since it is the buildup of greenhouse gases in the atmosphere that
causes climate change, a country’s cumulative emissions are a better indicator of
its level of responsibility than its annual emission rate.
Energy usage has seemed so critical to national economies that the amount of
energy consumed per capita has become one of the key indicators of modernization and progress. This, however, is a misleading indicator. It is the availability of
energy services which is the real measure of development, not energy consumption. For developing countries, measures promoting energy efficiency, renewable
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energy sources, and alternative technologies could allow them to leapfrog over the
relatively inefficient path of economic growth followed by the industrialized
countries and achieve a high level of energy services without the same economic,
social, and environmental costs.
What efforts are being made internationally
to move toward a sustainable energy future?
Most of the recent international discussions on energy have focused on climate
change concerns, rather than on the other significant economic, social, and environmental benefits of altering existing production and consumption patterns. In
connection with the Convention on Climate Change, there have been extensive
debates about the need to reduce worldwide dependence on fossil fuels as well as
the need for new technologies and new approaches to energy supplies.
At this point, however, climate change concerns alone do not provide sufficient
motivation to drive the transition towards sustainable energy policies. This might
change, of course, if the impacts of climate variability actually begin to be felt and
can be traced conclusively to accumulations of greenhouse gases caused by human
activities. In the meantime, focusing on the critical role of energy in sustainable
development may provide a more acceptable and effective route towards worldwide recognition of the need to change current energy patterns and policies.
The 1992 UN Framework Convention on Climate Change set specific emission
reduction goals only for industrialized countries, in light of their greater responsibility for greenhouse gas accumulations and their greater resources for addressing climate change problems. The convention also recognized that per capita
Energy usage has seemed so critical to national economies that the amount of
energy consumed per capita has become one of the key indicators of modernization and progress. This, however, is a misleading indicator. It is the availability
of energy services which is the real measure of development, not energy consumption. For developing countries, measures promoting energy efficiency,
renewable energy sources, and alternative technologies could allow them to
leapfrog over the relatively inefficient path of economic growth followed by the
industrialized countries and achieve a high level of energy services without the
same economic, social, and environmental costs.
emissions in developing countries are still relatively low, and will likely need to
grow in order for those countries to meet their social and developmental goals.
Acknowledging the fact that environmental protection cannot be dealt with separately from economic development, the convention called for financial and technical assistance for developing countries, as well as transfers of environmentally
friendly technologies in order to encourage their participation in international climate change mitigation efforts.
Worldwide demand for cleaner energy production has already been stimulated
to some extent by the Convention. Since a large proportion of future investments
in new energy capacity will be in developing countries, it is important to direct
international resources towards low-emission energy investments in those countries. The Kyoto Protocol to the Convention provides new incentives that encourage public and private investment by industrialized countries in energy efficiency
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Still, at this point, most countries will not choose unfamiliar or more expensive
energy options solely because they would help mitigate climate change impacts.
People are more likely to adopt new low-emission technologies because they provide affordable, reliable, effective, and convenient energy supplies. Concerns
about current local air quality and adverse health conditions are likely to be
more compelling than potential long-term environmental consequences.
projects and low-emission technologies that minimize additional greenhouse gas
emissions in developing countries. Moreover, emissions trading markets could
eventually generate large capital flows channeled into developing countries, which
could be used for climate change mitigation projects, including investments in
sustainable energy systems.
Still, at this point, most countries will not choose unfamiliar or more expensive
energy options solely because they would help mitigate climate change impacts.
People are more likely to adopt new low-emission technologies because they provide affordable, reliable, effective, and convenient energy supplies. Concerns about
current local air quality and adverse health conditions are likely to be more compelling than potential long-term environmental consequences.
At the 1997 Special Session of the United Nations General Assembly addressing
sustainable development, world leaders recognized that energy is essential to an
improved quality of life. They recommended greater international cooperation in
promoting energy conservation and efficiency, the use of non-fossil energy
sources, and the development of innovative energy-related technology. In furtherance of this goal, they decided that the ninth session of the UN Commission
on Sustainable Development in 2001 should focus on energy in its discussions and
negotiations.
A World Energy Assessment sponsored by the UN Development Programme,
the UN Department of Economic and Social Affairs, and the World Energy Council provides background scientific and technical information for evaluating the
social, economic, environmental, and security issues linked to energy, as well as an
analysis of technology and policy options for more sustainable production and
use of energy.2
What are the best ways to conserve energy and reduce greenhouse gas emissions?
Improved technological performance can provide opportunities for people to
enjoy satisfactory levels of energy services while consuming much less fuel and
generating lower emission levels. Heating and cooling of buildings, transportation, and industrial production are among the most promising areas for energy
efficiency gains.
Building design is an area with tremendous potential for energy savings. Better
insulation combined with passive solar design techniques can virtually eliminate
the need for traditional heating and cooling systems. Simple measures like planting shade trees, orienting buildings for optimal exposures, and placing windows
for cross ventilation can dramatically reduce energy requirements. New technologies like windows that let in sunlight but block unwanted heat can improve comfort while reducing costs and energy use. Inside houses and offices, the overall
energy drain can be minimized by using super-insulated refrigerators, compact
fluorescent light bulbs, and other types of energy-efficient equipment.
2 For further information see
http://www.undp.org/seed/eap
/activities/wea/images/
weahome.gif.
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Redesigned cars can also provide substantial reductions in emissions. Promising technologies include hybrid vehicles that combine small internal combustion
engines with electrical generators, as well as cars powered by fuel cells. Several
major manufacturers are already producing and marketing hybrid vehicles, and
several manufacturers have plans to introduce fuel cell engines starting in 2003. In
addition, transportation requirements can be reduced through urban designs that
eliminate sprawl and long commutes and instead emphasize pedestrian access as
well as mass transit facilities. Moreover, in some cases transportation needs can be
virtually eliminated by communications technologies that can make the home
into an effective workplace.
In manufacturing operations, there are substantial opportunities for improving the energy efficiency of energy intensive industries such as iron and steel production, chemical processing, petroleum refining, pulp and paper manufacturing,
and cement production. Improvements in production processes can boost energy
efficiency significantly and at the same time reduce material requirements. Cogeneration of heat and power is another promising avenue for cutting emissions.
What sorts of alternative energy sources can be used to produce power?
Renewable sources of energy already in use include solar, wind, hydro and geothermal technologies, in addition to biomass. Altogether, renewable energy technologies currently account for about 16% of world energy use. As these technologies become more advanced and widely distributed, they can provide
cost-effective alternatives capable of meeting a large percentage of the world’s
energy requirements. Moreover, they can help address local and national environmental problems like urban air pollution and acid rain as well as climate change.
The use of biomass fuels to replace fossil fuels is another way to reduce net
carbon emissions. Biomass fuels are derived from agricultural and other organic
wastes, or from special crops grown for that purpose. Biomass takes up carbon dioxide as the plants grow and releases it again when they are burned, so that the carbon
dioxide emissions do not add to overall atmospheric emission concentrations. Biomass can be used to produce liquid or gaseous fuels, and to generate electricity.
Hydroelectric generators are widely used renewable energy systems, providing
about 20% of the world’s electricity supply. They produce almost no greenhouse
gases and no local air pollution. Water wheels on fast-flowing rivers provided
energy for early textile factories. Now large hydropower plants generate electricity
by damming rivers and allowing the captured water to fall hundreds of feet
through turbines. These large-scale projects have come under intense criticism
because they require flooding of vast tracts of land behind the dams, interfere with
downstream flows, and hinder fish migrations and spawning. Small hydropower
plants are less destructive to natural ecosystems, however, since they have smaller
reservoirs, or in some cases simply channel the stream flow through the turbines.
Some of the other negative environmental impacts of hydroelectric facilities can
be reduced by the use of fish ladders to help fish migrate over dams, and maintenance of minimum flow rates to prevent downstream damage.
Wind energy has been used for centuries to pump water, mill grain, and power
ships. It is now being promoted as a non-polluting, renewable sources of electrical power. High-efficiency wind turbines are already being used to produce electricity for commercial distribution. Currently, the installed wind power capacity
throughout the world exceeds ten gigawatts, and its use is growing by about 30%
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Over the next hundred years the world’s commercial energy system will be
replaced at least twice, given the projected useful lives of power plants and
energy grids. That turnover in energy infrastructure, combined with
replacement of existing industrial, commercial, and residential facilities, will
present opportunities for a gradual transition to sustainable, low-emission
energy systems. The question, in terms of climate change mitigation, is whether
that transition will take place soon enough to avert dangerous interference with
the climate system.
per year. In windy areas, the cost of electricity produced in wind power stations is
competitive with new power plants that use fossil fuels. Small wind turbines
designed for small-scale residential and commercial use are attractive options for
remote rural areas. The electricity can be stored on-site in batteries (for very small
systems) or through compressed air storage for large applications. In areas when
there is an existing electricity grid, the electricity can be fed directly into the commercial distribution system.
Solar panels collect the sun’s energy and convert it directly into electricity by
means of photovoltaic cells. As with wind power, the electricity produced can be
stored in batteries and used in small-scale stand-alone power systems. Although
using solar panels to produce electricity is still expensive, it is the least cost choice
in certain niche applications. The photovoltaic market is currently 200 megawatts
per year, and is expected to grow by about 30% per year. Solar panels are most often
used in remote areas not reached by existing electrical transmission systems. They
can also be connected to the commercial power utility, providing needed energy
at peak demand times and avoiding the costs—and emissions—of new central
power stations. Building-integrated applications of photovoltaic technologies
reduce costs by incorporating the solar panels into the structure and surfaces of
homes and offices. Another form of solar energy technology concentrates the sun’s
rays onto receivers using mirrors or special lenses. The collected solar thermal
energy is then used to heat a liquid that drives a conventional electric power conversion system.
Geothermal energy stored in the earth’s crust can be used to heat buildings
directly and to generate electricity. The heat is partially released by the radioactive
decay of elements such as uranium and potassium. In areas where molten rock is
located near the earth’s surface, hydrothermal reservoirs have been discovered
filled with hot water. These reservoirs can be tapped to power electricity generators for commercial energy production or to provide space heating.
These types of cleaner technologies can provide environmentally sustainable
sources of power. As new investments are made in energy infrastructure, needs for
environmental protection and economic development can be met simultaneously
through the adoption of these new and renewable energy technologies. Over the
next hundred years the world’s commercial energy system will be replaced at least
twice, given the projected useful lives of power plants and energy grids. That
turnover in energy infrastructure, combined with replacement of existing industrial, commercial, and residential facilities, will present opportunities for a gradual transition to sustainable, low-emission energy systems. The question, in terms
of climate change mitigation, is whether that transition will take place soon
enough to avert dangerous interference with the climate system.
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Are there alternative ways to use fossil fuels
that can help reduce greenhouse gas emissions?
In some cases it is possible to reduce greenhouse gas emissions by switching to
low-carbon fossil fuels like natural gas. Natural gas produces slightly more than
half the carbon dioxide emissions per unit of energy produced by burning coal. It
is currently being adopted as a low-cost, low-emission fuel choice for new electric
power plants. In a compressed form it can be used as an alternative fuel for motor
vehicles.
There are also techniques for using fossil fuels in less polluting ways. One example is the production of syngas, a clean gaseous mixture consisting mainly of
carbon monoxide and hydrogen, which can be made from natural gas, coal, heavy
oils, petroleum coke, and a number of other substances. Syngas can be used to produce electricity and heat, as well as alternative gas and liquid fuels, with low levels
of pollution. With further processing, syngas can become a source of hydrogen for
use in fuel cells.
Fuel cells are electrochemical devices that convert fuels like hydrogen and natural gas into electricity directly, without any combustion, by combining the fuels
with oxygen from the air; consequently they produce almost no emissions, except
water. In the future, besides being used to power nonpolluting electric drive vehicles, they might also be used for central and decentralized electricity production.
Since emissions from motor vehicles represent a large percentage of overall carbon
dioxide emissions, commercialization of fuel cell vehicles would have a dramatic
impact on greenhouse gas accumulations, and on urban air quality.
As fuel cells systems become more widely available, hydrogen could become the
preferred fuel for transportation and electricity production. Hydrogen can be produced through steam processing of natural gas or syngas, through gasification of
coal or other carbon-based feedstocks and through electrolysis of water. Processing fossil fuels to produce hydrogen is currently the least expensive technique, one
which could provide a way to use familiar fuels in new, low-emission technologies
without significantly increasing energy costs.
How can developing countries meet increasing demands for energy services to fuel
economic and social progress while limiting climate change impacts?
Energy efficiency efforts and investments in renewable energy technologies are
essential for establishing sustainable energy systems both in developing countries
and in industrialized nations. But there are considerable economic and social disparities between the richer, high-consuming nations and the poorest ones. Developing countries require greater availability of energy services that can be used for
household needs and productive purposes, which will lead to increased use of
energy.
Rather than focusing on increasing overall energy supplies, developing countries would be better served by using integrated resource techniques to identify the
lowest-cost and most efficient options for achieving their energy goals. This concept involves undertaking comparisons of various energy supply technologies,
such as conventional coal-powered plants, wind turbines, hydroelectric generators facilities, and photovoltaic installations, while also considering installation of
end-use technologies that reduce energy demand levels, like compact fluorescent
light bulbs and increased insulation. After evaluating all the potential options, the
lowest-cost mix of technologies can be identified and adopted as investment pri-
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orities. In many cases, the technologies that seem to be the cheapest and easiest in
the short-term turn out not to be the most cost-effective or efficient from a slightly
longer term perspective, especially when their social, environmental, and health
costs are also considered.
Investments in new production and distribution facilities that emphasize
energy efficiency can dramatically reduce energy requirements in comparison with
conventional power plants and manufacturing operations. The additional costs
attributable to the introduction of these energy-efficient technologies will generally be offset by reductions in the price of energy. Because traditional sources of
energy are used so inefficiently, and because countries constructing modern facilities have the opportunity to utilize new energy-efficient technologies and equipment, they can achieve substantial improvements in living standards without significantly increasing per capita energy use over current levels. Following this path,
developing countries could pursue their economic and social development goals
without substantially increasing their energy consumption or emissions levels.
Most of the two billion people who lack modern energy services live in rural
areas in developing countries. Projected capital costs for extending conventional
electric power grids into these areas are prohibitively expensive, so their prospects
for obtaining grid-based electrical service in the near future are not encouraging.
Decentralized renewable energy systems, however, could provide electrical power
to these remote areas more quickly and less expensively—without producing
greenhouse gas emissions. Introduction of these systems could promote employment and educational opportunities in rural areas, as well as improved access to
health care, clean water, and sanitation facilities.
Renewable energy systems using wind, solar, biomass, and small-scale hydroelectric power are particularly easily adapted for rural electrification purposes.
Rural consumers relying on inefficient use of fossil fuels like kerosene and diesel
are often already paying high energy prices and would be better served at lower
cost by modern renewable technologies, if these became available to them. Others,
particularly women, who must now spend long hours gathering and using traditional fuels, could gain both time and electrical power that could be applied to
other productive purposes.
What barriers are there to the adoption of sustainable energy technologies?
Primary obstacles to the wider application of energy efficiency measures and
installation of renewable energy systems include: low commodity market prices
for fossil fuels; government subsidies that support conventional fossil fuel technologies; energy prices that do not incorporate environmental and social costs;
discrimination in capital markets against small-scale energy and energy-efficiency
projects; and general lack of information about new designs for low-emission and
renewable energy systems. In addition, there are formidable economic and institutional forces opposed to a transition in world energy markets away from continuing reliance on fossil fuel technologies.
Current national and international debates about the prospective hazards of
climate change have, to some extent, raised public awareness concerning the need
to alter energy production and consumption patterns. But there is not yet any general consensus about the impacts of climate change and the need for concerted
mitigation efforts. Much more public education is needed regarding low-emission
energy alternatives.
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Existing subsidies for fossil fuel technologies make it very difficult for alternative energy products to enter markets or achieve competitive positions. Worldwide, these subsidies amount to some 200 billion U.S. dollars per year and actually encourage wasteful consumption by failing to pass on to users the real market
costs of providing the energy fuel. Direct government subsidies often take the
form of payments designed to hold down consumer energy prices. On the production side, subsidies frequently provide incentives and support for fossil fuel
exploration and processing. Although intended to enhance the availability and
affordability of energy services, these subsidies limit energy choices by favoring
existing fossil fuel energy systems and suppliers.
Additional indirect subsidies are granted to conventional energy providers in
the form of tax credits and exemptions, depreciation allowances, preferential
loans and guarantees, and procurement preferences. Public financing of conventional utilities by means of tax exempt bonds and low interest loans means that
potential competitors seeking to introduce competing renewable energy systems
will have to pay much higher amounts for needed capital. Many countries also
grant monopolies to national utilities, thereby removing the possibility of any real
energy market competition. Restructuring of energy markets to introduce competition can reduce costs but, without accompanying regulatory measures, can
also make it less likely that energy suppliers will support public benefits.
Even without the artificial minimization of prices provided by government
subsidies, fossil fuel prices are already unrealistically low because they do not
include all of the costs associated with their production and use. Environmental
and public health costs are externalized, that is, paid for by society as a whole
rather charged to the producers, vendors, or consumers of fossil fuels. These costs
include public health and cleanup expenditures attributable to air pollution and
water contamination, the effects of acid rain, damages to land and ecosystems due
to fossil fuel extraction and distribution and, of course, the impacts and mitigation costs related to climate change. Unless damages to the environment are
charged back to responsible parties, market-pricing mechanisms will encourage
destruction of resources rather than conservation.
Widespread dissemination of information about the advantages of energy
efficiency and alternative energy technologies is needed in order to build awareness and confidence among investors, lenders, governments, and consumers. Too
often, ignorance about energy efficiency and renewable energy technologies keeps
them from receiving serious consideration in energy planning processes.
What sorts of policies would create an enabling framework
to promote environmentally sustainable energy systems?
Governments can set the overall framework for economic activity, but clearly sustainable energy development cannot be accomplished by governments alone. For
the most part, governments are moving away from acting as direct providers of
energy services. Instead, many are taking steps to establish more efficient and environmentally sustainable energy markets. In general, this will require the breakup
of monopolies and promotion of competitive markets. Since private capital will
be required, maintenance of stable investment, banking, and legal institutions will
become a fundamental priority in order to attract lenders and investors. New
incentives for investments and entrepreneurial ventures will also be needed to
promote environmentally friendly products and services.
  
One of the most important things that governments can do is to help create a
level playing field for competing energy technologies. As a first step, this will
require elimination, or redirection, of subsidies for conventional fossil fuel technologies. Energy price subsidies are generally designed to help low-income households, but often the intended beneficiaries receive only a small portion of the total
subsidy amount, while other consumers who could afford to pay more obtain the
largest share of the government benefit. More carefully targeted measures could
provide the desired support to poorer families without distorting the entire energy
market. Temporary subsidies for energy efficiency measures and installation of
alternative energy systems could also help establish competitive opportunities to
attract new market entrants.
Another important step in leveling the playing field for energy technologies
will be to set up mechanisms for taking into account the environmental and social
costs attached to the use of fossil fuels. These external costs can be charged back to
One of the most important things that governments can do is to help create a
level playing field for competing energy technologies. As a first step, this will
require elimination, or redirection, of subsidies for conventional fossil fuel technologies.
those who enjoy the profits and benefits of the energy use through carbon emission taxes, usage fees, or fines for damages. Resulting revenues could be used to
support more environmentally sustainable enterprises. Governments can also
adopt regulations limiting environmentally harmful activities, including greenhouse gas emissions, thereby pressuring energy companies to develop and market
new alternatives. Other alternatives for government interventions include tax
incentives, collaborative research and development ventures, and green labeling
schemes.
Government subsidies, supports, and procurement preferences can help open
markets for new technologies and build public awareness of their environmental
and economic benefits. Direct government support may be needed to demonstrate the advantages of some new energy technologies. In order to move beyond
demonstration projects, however, there will have to be established marketing, distribution and service networks for new energy products. Restructuring energy
industries is one strategy for introducing competition and decentralization in the
energy market. With proper regulations and policies that support investment and
competition, governments can promote economic efficiency and diversification
in the energy sector while also encouraging sustainable development and addressing the needs of disadvantaged groups. Market reforms can be accompanied by
such measures as environmental performance requirements for energy equipment, green certificate markets or renewable portfolio standards mandating that
a specified percentage of energy be produced using renewable sources, and
requirements that energy grids be open for inputs from independent power producers.
One option for promoting energy efficiency is through the creation of energy
service companies. These companies introduce efficiency measures designed to
reduce energy usage in commercial and residential buildings, and are paid out of
the cost savings they are able to achieve. Customers continue to pay regular utility
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bills, and the energy service company finances its operations by being able to engineer energy savings. After the energy service company has completed its work, customers will enjoy lower utility bills, and the building will produce lower emissions.
Appropriate financing mechanisms for alternative energy producers and consumers are critical. In rural areas, micro-credit financing for renewable energy systems can help provide access to energy services for currently unserved users who
cannot afford high initial capital costs, but can afford monthly fees similar to a regular utility bill. In some cases, poor households are paying high costs for small
amounts of inefficient energy services based on the use of kerosene, candles, fuel
wood, or diesel generators. Although they might not be able to pay up-front for
solar panels or a wind generator, many probably could afford to pay for them over
time if credit facilities were available. By facilitating the organization of investment pools designed to provide small loans for small-scale electrification projects,
governments could contribute to the widespread dissemination of low-emission
energy technologies and also promote employment, education, and public health.
What framework does the Kyoto Protocol provide for
international agreement on reducing the threats of climate change?
The Kyoto Protocol established plans for industrialized countries to reduce greenhouse gas emissions by agreeing to adopt legally binding emission targets which
are to be met in the period extending from 2008 to 2010. Overall, the industrialized countries committed to a reduction of their combined emissions by approximately 5% from 1990 levels. The specific targets vary, however, from country to
country. The reduction target for the United States is 7% below 1990 levels, and
Japan’s target is 6%. The European Union has a general target of 8% below 1990
levels, but that is averaged among the group members so that some of the poorer
members will actually be allowed to increase their emissions while others will be
required to make substantially greater reductions. Russia’s target is stabilization of
emissions at its 1990 level. The Protocol will enter into force when it is ratified by
55 countries, including countries responsible for at least 55% of the total 1990
carbon dioxide emissions from the industrialized country group.
The Protocol contains legally binding commitments only for the industrialized
countries. Under the 1992 Climate Change Convention, developing countries
agreed to facilitate emission reductions. Many are already actively promoting
energy efficiency and renewable energy technologies, but they did not commit to
specific reduction targets.
The Kyoto Protocol contains provisions for a “Clean Development Mechanism,” which is intended to assist non-industrialized countries in achieving sustainable development and in contributing to the ultimate objective of the Convention on Climate Change, while assisting industrialized countries in achieving
compliance with their quantified emissions limitations and reduction commitments under the Convention. The mechanism will permit industrialized countries
to finance emission-reduction projects in developing countries as a means of
meeting their obligations under the Protocol. Developing countries could benefit
by receiving financing for the adoption of low-emission energy technologies,
while industrialized countries could fulfill their emission reduction commitments
at a lower cost.
It is often less costly to achieve emission reductions in areas where new power
supply systems are being constructed, before energy-using infrastructures are
  
established, rather than trying to limit emissions from existing facilities. Thus,
developing countries could potentially obtain substantial investments in energy
technologies that would promote their own national development programs and
at the same time assist industrialized countries in pursuing low-cost climate
change mitigation measures. Although the details of the Clean Development
Mechanism remain to be worked out, it holds out the promise of mutually supportive international cooperation in addressing both the sustainable development
and climate change challenges.
Conclusion
Energy is fundamental for socioeconomic growth, but current patterns of energy
production, distribution and use do not support the sustainable development
goals of environmental protection and social equity. Making a transition to new
models for energy markets throughout the world is an enormous undertaking,
requiring complex, long-term strategies that engage consumers and producers as
well as governments. It is an attainable goal, however, to reconcile economic
growth with wider access to reliable and affordable energy supplies and with
reduced environmental harm.
Through international cooperation, and through adoption of appropriate policies and economic frameworks, governments can promote energy efficiency, use of
renewables, and cleaner conventional fuel technologies. Perhaps the most important impact of these measures would be to allow countries that are not yet industrialized to follow cleaner routes to development—routes that provide the energy
services needed for improved health care, education, livelihoods, clean water, transportation, and communications, while limiting greenhouse gas emissions.
Reference materials
. Energy After Rio: Prospects and Challenges. New York: United Nations Publications, 1997.
. Issues and Options: The Clean Development Mechanism. New York: United
Nations Publications, 1998.
 and The World Resources Institute. Trends and Baselines: Promoting Development While Limiting Greenhouse Gas Emissions. New York: United Nations
Publications, 1998.
UN Department of Social and Economic Affairs, , and the World Energy
Council. World Energy Assessment, available at www.undp.org/seed/eap/activities.
Thomas B. Johansson is the Director of the Energy and Atmosphere Programme of
the Sustainable Energy and Environmental Division in the Bureau for Programme
and Policy Services of the United Nations Development Programme (undp). On
leave from the University of Lund in Sweden, Professor Johansson will be teaching
energy policy at the Yale School of Forestry and Environmental Studies starting in the
spring of 2001. He has served as the Convening Lead Author of the ipcc Energy
Supply Mitigation Options (Working Group IIA); Vice-Chairman of the UN Committee on New and Renewable Sources of Energy and on Energy for Development;Chairman of the UN Solar Energy Group for Environment and Development (unseged);
Director of Vattenfall, the Swedish State Power Board; and International Co-Chair-
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man of the Working Group on Energy Strategies and Technologies of the China
Council for International Cooperation on Environment and Development. His publications include Energy After Rio: Prospects and Challenges, Renewable Energy:
Sources for Fuels and Electricity, and Energy for a Sustainable World.
Professor Thomas B. Johansson
Director, Energy & Atmosphere Programme
United Nations Development Programme
304 East 45th Street, Room 9100
New York, NY 10017
Telephone: 212.906.5030
Fax: 212.906.5148
E-mail: tjohanss@undp.org
Gail V. Karlsson is an environmental lawyer based in New York City. She is a consultant to the United Nations Development Programme in the Energy and Atmosphere
Programme. Ms. Karlsson has been a lawyer with the United States Environmental
Protection Agency and with the New York firm of Lord Day & Lord, Barrett Smith. Ms.
Karlsson has participated in all of the sessions of the UN Commission on Sustainable
Development (csd) as a representative of the United Nations Association-USA and,
for the last several years, as a non-governmental advisor on the United States delegation to the csd. She has also written extensively about environmental protection
and sustainable development.
Gail V. Karlsson
258 Broadway 5A
New York, NY 10007
Telephone: 212.267.4239
Fax: 212.587.1148
E-mail: gkarlsson@igc.org