Home The Washington Diplomat June 2012

At Rio+20, U.S. Can Promote Sustainable Energy for All

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Global development depends in part on access to reliable, affordable, convenient and safe cooking fuels and electricity to power economic growth and improve living standards. People live longer, healthier and more productive lives when they don't spend hours each day gathering fuel and breathing smoky air, and when they don't have to stop reading, studying or working when it is dark.

Today, 1.3 billion people lack access to electricity and roughly 2.7 billion are without access to clean, safe cooking fuel. Giving them access to such energy is a development imperative. At the same time, successfully confronting climate change, the impacts of which are already being felt disproportionately by the poor, will require a global shift toward sustainable energy — namely a mix of renewable energy sources, fossil fuels and energy-efficiency measures that by mid-century produce zero or minimal greenhouse gas emissions.

Because unmanageable climate change risks threaten to reverse hard-won development gains, efforts to end energy poverty must be compatible with climate goals. Fortunately, the two are compatible. The International Energy Agency estimates that ending energy poverty using a mix of energy sources and policies would only increase carbon dioxide emissions by 0.7 percent in 2030.

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Credit: UN Photo / Eskinder Debebe
U.N. Secretary-General Ban Ki-moon, right, attends the launch of "Rio+20: The Future We Want," a campaign for people around the world to contribute to discussions on sustainability ahead of the U.N. Conference on Sustainable Development in Rio de Janeiro this month.

Exciting things are happening on energy. Improved cook stoves, new inexpensive solar lanterns and numerous other technologies are saving lives, improving the quality of life, and creating new livelihoods in even the most impoverished, rural areas. Today, many companies and governments around the world have the technological and managerial skills and financial expertise to help address the sustainable energy challenge, while environmental and poverty-oriented NGOs have large networks of supporters for whom these issues have strong resonance.

What's lacking most are creative and politically feasible partnerships to scale up these efforts and mobilize financial resources. Fortunately, the occasion of the United Nations Conference on Sustainable Development (Rio+20), which marks the 20th anniversary of the original Earth Summit in Rio de Janeiro this June, provides a useful fulcrum for lifting global ambitions.

At the Rio+20 Conference, world leaders, along with some 50,000 participants from governments, the private sector, NGOs and other groups, will come together and try to agree on an "outcome document" detailing ways to reduce poverty, advance social equity, and ensure environmental protection on an increasingly crowded planet.

However, with the United States in the midst of a presidential election campaign, high unemployment rates and financial uncertainty, the nation, like many others, is squarely focused on pressing domestic challenges. There is almost no appetite for new international commitments and little pressure from U.S. constituents to deliver at Rio+20. Environmental groups are concerned primarily about domestic energy and clean air policies. Development advocates are working hard to avoid draconian budget cuts to foreign aid programs that may flow from the deficit reduction law passed in 2011.

Still, many around the world are eager for stronger U.S. leadership to advance both the vision and promise of sustainable development, and outlining a clear vision and a concrete set of policies for global sustainable development would be good U.S. foreign policy. These are important challenges, and America has much to offer if it decides to engage. To that end, we have outlined a number of politically feasible recommendations for the Obama administration and Congress to consider — ideas that would contribute to the global effort to realize sustainable energy for all at Rio+20.

To begin with, the United States should support the U.N. secretary-general's "Sustainable Energy for All" initiative (sometimes referred to as "SE4ALL"), which proposes that governments, businesses and civil society commit to three complementary goals to be achieved by 2030: 1) ensure universal access to modern energy services, 2) double the global rate of improvement in energy efficiency, and 3) double the share of renewable energy in the global energy mix.

While these goals lack measurability as currently conceived (there are no baselines against which to judge progress) and perhaps also a degree of ambition if defined too loosely, new energy goals (like the Millennium Development Goals they mimic) would likely bring greater global attention to energy poverty and over time greater resources to bear on sustainable energy deployment. At Rio, therefore, the United States could at a minimum work to ensure that the international community endorses the secretary-general's objectives and folds them into a member state-driven process to refine and expand by a date certain.

Second, the United States should offer concrete ideas for how to scale up technical assistance and knowledge sharing on best-practice policies that will help channel the $5 trillion invested annually in energy infrastructure projects to sustainable alternatives. For example, the Clean Energy Solutions Center, a virtual network of experts on and tools for energy policy funded by the United States and Australia through the Clean Energy Ministerial, should be expanded. The virtual network should integrate the technical capacity of existing bricks-and-mortar centers of applied policy research across the world. Strengthening this global network would enable nations to build domestic capacity and gather helpful insights about how best to achieve sustainable energy, building on lessons learned elsewhere. To be effective, these institutions should be prefunded by the international community to assist any government with the political will to tailor and implement proven policies for achieving sustainable energy for all.

This theory of change — spreading knowledge through a global network of experts that serves as a global public good that governments can access largely without cost — is precisely how the international community spread the knowledge needed for the green revolution in the 1960s via the Consultative Group for International Agricultural Research. While the subject matters are quite different, the challenge is fundamentally the same: ensuring that people everywhere learn what has worked elsewhere and applying those lessons locally in appropriate and tailored solutions. In the case of energy, as was true for agriculture, implementing the right policies will be essential to success.

Third, the United States should announce at Rio+20 its commitment to work with other nations to develop a new "deal flow generator" — a new mechanism within existing international financial institutions that would connect long-term investors (including pension funds, life insurance, endowment funds and sovereign wealth funds) with sustainable energy for all investment opportunities.

According to the International Monetary Fund, long-term institutional investors in developed nations held $60 trillion in total assets, while bank assets in these countries amounted to an additional $72 trillion in 2009. Many private investors, including pension and sovereign wealth funds, are eager to invest in sustainable energy ventures. What's missing is not interest or funds, but rather an abundance of investment-grade opportunities; there just are not enough projects that meet basic investment criteria to attract big money.

This new mechanism would alleviate the problem by aggregating sustainable energy projects to create large-scale investment opportunities; perform due diligence on projects and rate investment opportunities to help private investors manage risk; and cluster projects or securitize them to create liquid and tradable assets that could be traded on private secondary markets.

Such a mechanism would naturally build on the work being done in the context of the U.S.-Brazil Joint Initiative on Urban Sustainability, a platform seeking to mobilize large-scale investment in green infrastructure in both Rio de Janeiro and Philadelphia. As part of this initiative, partners are working to aggregate and bundle small-scale infrastructure projects into investment-size portfolios for diverse investors ranging from the World Bank to Goldman Sachs. Scaling up this effort to the global level to support sustainable energy would provide a useful starting point.

Finally, the U.S. government should announce a suite of new initiatives to extend the impact of the nation's foreign investment agencies, including the Overseas Private Investment Corporation (OPIC) and the Export-Import Bank (Ex-Im). In addition to more funding, which remains essential, the United States should expand beyond the use of traditional techniques and offer new products including: "first loss" funds; dedicated seed funding to help small and medium businesses work with developing countries on sustainable energy projects; co-financing initiatives with counterparts in Germany, Japan and other developed nations to more effectively align and leverage available global public funding; and create a new equity fund reserved only for equity investments that have high expected returns from a sustainable energy standpoint.

In conclusion, a major global effort to promote energy efficiency, renewable energy and energy access in the name of sustainable energy for all would produce tremendous benefits for international development and the climate. While the economic, fiscal and political conditions for such a campaign are far from ideal, the Rio+20 summit in June presents a number of important opportunities for progress.

With the right preparations, Rio+20 could help set clear and compelling global clean energy and energy access goals, while also launching innovative public-private partnerships to move the world decisively toward action.

The United States must do its part. Focusing as they do on unleashing private enterprise, stimulating economic growth and expanding trade, these recommendations would advance U.S. economic, development and climate goals in ways that would attract broad political support at home and abroad. Sustainable development requires sustainable energy, and the United States should be at the forefront of promoting both.


About the Author

Nigel Purvis is the president and CEO of Climate Advisers and former U.S. deputy assistant secretary of state for oceans, environment and science. Abigail Jones is director of research and policy at Climate Advisers.

This paper is an abridged version of the April 2012 article "Energizing Rio+20: How the United States Can Promote Sustainable Energy for all at the 2012 Earth Summit," first published by the Center for Global Development with support from the Danish Embassy.

Last Edited on May 31, 2012