The call for a new low carbon economy is echoing through the halls of COP 21. In the opening ceremony, French President Francois Hollande, Prince Charles, and UN Secretary General Ban Ki Moon all urged the world to transition to a new low carbon economy.
Making that transition requires action on multiple fronts. First, countries must address market distorting and environmentally destructive fossil fuel subsidies. Second, countries must power their economies with renewable energy.
Two separate events today indicated that countries and industry are starting to make that transition. Friends of Fossil Fuel Subsidy Reform unveiled a communiqué calling on all countries to stop the subsidization of carbon intensive fossil fuels. Indian Prime Minister Modi and French President Hollande, launched the International Solar Alliance to help bring solar power to developing countries. Presented separately but connected by common goal, the two projects are cutting the path to a new clean energy economy.
Countries spend almost $500 billion/year on fossil fuel subsidies. They subsidize the consumption and production of fossil fuels. The subsidies unfairly tilt the market towards carbon intensive fossil by preventing clean energy technologies from competing on a level playing field. The FFFSR communiqué urged countries to take the money spent on fossil fuel subsidies and repurpose it to enhance education, health, and environmental programs. Countries have argued that subsidies are necessary to support the poor, who could not otherwise afford fuel. FFFSR research revealed that only 3 percent of subsidies are used to support the lowest income brackets.
The International Solar Alliance (ISA) is multi-country partnership to bring solar power to developing nations. The ISA is focused on increasing solar power generation in the 120 countries located between the Tropics of Cancer and Capricorn. Developing nations often have an abundance of solar potential but they lack the technology and finance to develop their resources. Germany, Italy, and Japan, the countries with the highest rates of solar penetration, are not rich in solar resources but are rich in technology and finance. The ISA will bring solar power to where it has the most economic and environmental potential.
The developing countries targeted by the ISA are areas where power usage is increasing. Adding renewable power to the grid in a developing country displaces high carbon emitting resources. For example, India is third largest consumer of coal in the world, it also has 300 million people who lack electricity. The type of electricity used to connect that group will have a huge impact on global climate change mitigation efforts. India is choosing the renewable energy pathway by setting a goal of 100 GW of installed solar power by 2020. India currently has 4 GW of installed solar power. To bridge this gap, India will need international financial and technology support.
India is investing $30 M USD in a new National Institute of Solar Technology with the goal of reducing regulatory hurdles, developing common standards to speed up production, developing innovative finance mechanisms, and supporting technology improvements. Estimates of the total investment needed to realize the solar potential of developing countries reach $1000 billion; a number that could be easily reached by re-tasking fossil fuel subsidies.
Developing nations have an untapped resource shining down on them. The ISA aims to spur transformative action in this field. Today, Prime Minister Modi started his announcement by stating that many Indians begin their day with a prayer to the sun. He ended his presentation by proclaiming that the ISA represents a “sunrise of new hope.” A sunset on fossil fuels would help the sun rise on a new low carbon economy future.