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UNDESA Assesses Energy Investments Required to Achieve Sustainable Development

UNDESAJanuary 2014: A policy brief published by the UN Department of Economic and Social Affairs (DESA) points to the emerging consensus that sustainable development requires a radical transformation of the world's energy system, including the way energy is produced and used, and that such a transformation requires strong leadership, carefully-designed policies, behavior changes, and large investments, both in developed and developing countries.

An estimated US$0.7 trillion per year between 2011 and 2030 is the amount required to build a sustainable system, according to the 2013 Green Economy Investment Report. However, these estimates vary significantly, with the Global Energy Assessment (GEA) proposing a range from US$0.14 trillion to over US$4 trillion per year, depending on, inter alia, the policies and technologies in place, related investment costs required to use alternative energy sources, and projected technology development costs. Furthermore, required investments will: almost double if the additional investments costs to adapt devices to new energy sources are taken into account; and increase five-fold if broad energy investments, such as the cost of fostering innovation, market creation for alternative energy sources and technology diffusion, are considered. On the other hand, achieving energy inclusion requires relatively modest investments. For example, estimates to provide universal access to clean cooking fuel and electricity range between US$0.03 to US$0.04 trillion per year, with negligible greenhouse gas (GHG) emissions generated.

The brief, titled 'Achieving Sustainable Development: the Energy Investment Challenge,' describes how the GEA examines 60 scenarios, through a combination of policies addressing energy, transportation and technology, and considers: three demand and supply energy paths; two transport modes (continued reliance on traditional or adopting advanced technologies and fuels; and ten technology portfolios defined by technology access). The brief explains that a sustainable path must: provide universal access to modern energy; ensure good air quality to the majority of the world's population; contain average global temperature rise to below 2ºC; limit energy trade and enhance energy supply diversity and resilience; and prioritize policies that promote energy efficiency.

The brief also underscores that: the investment volume required varies widely across regions, with higher investments needed for low-income regions; and early adoption of policies aiming to increase energy efficiency, promote the use of renewables, and deepen social inclusion, can significantly reduce amount of investments needed. It advocates: building national capacities to identify and adopt the best policies; financial resources, intensive technological innovation and faster technology transfer to developing countries; strong systems for research, development and diffusion of renewable energy technologies to spur technological innovation in developing countries; and timely design of coherent policies covering economic, social and environmental areas. [Publication: Achieving Sustainable Development: The Energy Investment Challenge]