I’m in the beautiful city of Lima, at the annual United Nations climate talks, or COP 20. Even as negotiators labor over “non-papers” and “elements of draft negotiating text,” the real buzz here is about the incredible opportunity to drive down global emissions by investing in renewable energy and energy efficiency. What makes this a particularly exciting time is that the costs of renewable energy are falling dramatically. The clean energy transition has never been more affordable – or, frankly, more urgently needed.
Global progress on renewable energy
Renewable energy is growing by leaps and bounds worldwide. In 2013, renewables accounted for more than 56 percent of net additions to global power capacity. Recent data from Bloomberg New Energy Finance (BNEF) shows that global clean energy investment in the first three quarters of 2014 added up to $175 billion, 16 percent higher than in the same period of 2013.
Solar energy, in particular, has experienced tremendous growth. In 2013, for the first time, global growth in solar photovoltaic (PV) outpaced new wind capacity. Annual growth in global solar PV capacity has averaged almost 55 percent over the past five years.
Recent news stories have highlighted that investment banks are also increasingly recognizing the financial benefits of investments in renewable energy. For example, Goldman Sachs has committed to $40 billion in existing and planned renewables investments, including in BrightSource Energy, which designed the solar thermal system for Ivanpah, the largest solar plant in the world.
However, to scale up clean energy even more rapidly to help meet climate goals, we need strong policy support, such as renewable energy and energy efficiency standards and incentives; investments in transmission infrastructure to integrate higher levels of renewable energy; investments in research and development; and a price on carbon. The rapid growth of renewables, their falling costs, and the urgent need to reduce carbon emissions makes a weak extension of the production tax credit by the U.S. Congress —an effective federal incentive that supports business development of wind and other renewable energy sources— seem all the more misguided.
The dramatically falling costs of renewable energy
Renewable energy costs are falling worldwide. In the U.S., for example, the national average cost of wind power has dropped more than 60 percent since 2009, making it competitive with new fossil fuel plants in many regions. Solar PV system costs fell by about 40 percent from 2008 to 2012 and by another 15 percent in 2013.
Looking ahead, the two trends of improved technologies and reduced costs are expected to continue, according to research from BNEF, the International Renewable Energy Agency (IRENA), and the National Renewable Energy Laboratory (NREL), U.S. Department of Energy.
A race to the top
In a joint climate announcement with the U.S., China set a goal of achieving a 20 percent share of non-fossil energy in total primary energy by 2030. Renewable Energy Prospects: China, a recent report from IRENA and the China Renewable Energy Centre, shows that China can meet and exceed that goal affordably. The analysis shows that China can increase its renewable share of energy from 13 to 26 percent by 2030, and the share of renewables in the power sector to 40 percent by 2030. This pathway would also help deliver tremendous public health benefits to a country plagued by pollution from its dependence on coal-fired power.
The U.S. has announced a draft Clean Power Plan to limit carbon emissions from power plants, the single largest source of those emissions in the country. Analysis by UCS shows that the draft plan can be strengthened to raise emission reductions from 30 to 40 percent below 2005 levels by 2030 simply by increasing the contribution from renewable energy. Other elements of the President’s Climate Action Plan, including increasing fuel economy standards and implementing methane regulations, can cut emissions further.
What’s also striking is that the top two countries competing neck and neck in renewable energy deployment are China and the United States, also the world’s two biggest carbon emitters currently. Germany, Spain, Italy, and India round out the list of the top six countries in terms of non-hydro renewable energy capacity.
While all major emitting countries clearly can and should do more, these are promising times for catalyzing ambitious global climate action.
Renewable energy and energy efficiency are essential to meet climate goals
A number of global research efforts are underway to show the feasibility and affordability of deep cuts in emissions. IRENA has recently launched the ReMap 2030 project to analyze global pathways for doubling the share of renewable energy in the world’s energy mix by 2030. The Deep Decarbonization Pathways project, a joint initiative of the Sustainable Development Solutions Network (SDSN) and the Institute for Sustainable Development and International Relations (IDDRI), shows how individual countries can contribute to a global goal of limiting temperature increases to no more than 2°C. The IEA’s World Energy Outlook also provides analysis to back a 450ppm CO2equivalent global pathway.
The common theme of all these reports, written by experts from all over the world, is that it is feasible to jump start a clean energy transition and that we cannot achieve our climate goals without a very ambitious ramp-up in renewable energy and energy efficiency.
What’s more, many studies are also pointing out that this transition is affordable and beneficial for the global economy and for public health.
Will the climate negotiations help deliver a renewable energy future for all?
In the last two days at Lima, we’ve seen tremendous interest in an ambitious mid-century goal of phasing out carbon emissions and moving to a 100 percent renewable energy world. Getting all the way there may seem unreachable right now, but there’s no denying that we can get a very long way toward that goal with existing, affordable clean energy technologies while investing in research and development for new ones. Including strong science-based emission reduction and renewable energy goals in the negotiating text in Lima and the final agreement in Paris next year would signal that an end to the carbon-intensive economy is on its way.
Freeing the world of its addiction to fossil fuels is what we must do to avoid the 4°C (or worse) world –the kind of world the Prime Minister of Tuvalu, Enele Sopoaga, called yesterday “hell on earth.”
Correction: This post has been updated to correct the names of the institutions behind the Deep Decarbonization Pathways project.