The Myth of “Progress First, Decarbonize Later” for Developing Economies

By Vicky Harris, Vice President Marketing on September 04, 2018
Vicky Harris
Home  / Blog  /  The Myth of “Progress First, Decarbonize Later” for Developing Economies

On the surface, it is a rationale that makes sense: it is not fair to ask developing economies to make the clean energy sacrifices that the developed world did not make to achieve prosperity. After all, countries deserve the opportunity to grow at their own pace. The problem is that the premise behind this common argument for letting the developing world burn their way to prosperity is fundamentally flawed. Decarbonization is no longer a sacrifice, no matter what angle you examine it from. Whether it is cost, availability, or access, clean energy has reached an inflection point and is competitive to carbon-emitting alternatives. Economic growth and sustainability are now two sides of the same coin.

The new dawn: Renewables in the developing world rise faster than ever before.

The Developing World Goes Green

Last week, Cleantech published an article indicating that the investments in renewables from the developing world have “eclipsed” those of the developed world since 2016. The size and growth of cleantech investments in traditional developing countries like Egypt, Brazil, and Argentina, alongside big developing economies like China and the United Arab Emirates, now surpasses that of developed European and North American economies.

For decades, ever since the Kyoto Protocol was negotiated in 1997, the international community assumed and agreed that developing nations needed time to grow their economies before serious decarbonization measures were imposed. Back then, renewables were not competitive with fossil fuels. It only seemed logical and fair to give these growing economies the same window of opportunity with lower cost fossil fuels that developed countries enjoyed for most of the 20th century. “We need time to pollute our way to growth” was a common request from developing economies, which was generally met without much opposition from the international community.

Since then things have changed faster that anybody could have predicted. In May, we wrote an article exploring how renewables have reached an inflection point that quoted Forbes as saying, “For the first time in history, the production cost of renewables is lower than that of fossil fuels.” Their supporting data came from analysis conducted by Bloomberg, The Frankfurt School, Renewable Cost Database of the International Agency for Renewable Energy (IRENA), and UN Environment, which revealed that the cost range per-megawatt-hour for the production of renewable energy today stands at $35 to $54 versus $49 to $174 for fossil fuels.

Decarbonize to Grow

The new economics of renewables means that solar and wind are now financially viable alternatives to grow sustainably; hydrogen is also beginning to follow the typical growth curve for transformative technologies. Accordingly, the argument of “grow first, decarbonize later” no longer holds true.

The article from Cleantech, for instance, points out that “from 2016 to 2017, China ramped up [renewables] investments by 31 percent, imbuing a record $126.6 billion. Thanks to its commitment, China is home to half of the world’s solar energy capacity.” They further add, “In the 2018 Global Trends In Renewable Energy Investment Report from Bloomberg New Energy Finance and the United Nations Environment Programme (UNEP), nations in Africa, Southwest Asia, and Latin America blew their 2016 contributions out of the water. In Latin America, Mexico increased investments by 810 percent, Argentina by 777 percent, Chile by 55 percent, Peru by 66 percent, and Costa Rica by 31 percent.”

These facts point to a new reality; the old argument of grow-then-decarbonize seems to have been reversed. Such investments result in a truly circular economy. Renewables bring with them new jobs, and completely new industries emerge to support ancillary services, such as installation and maintenance of turbines and solar panels. Renewables also bring health benefits to entire populations, especially those living in cities, as transportation and industry take advantage of competitive renewables that translate into overall increases in productivity and citizen well-being.

Growing Clean

With the developing world joining the ranks of stronger economies when it comes to the sustainable use of energy, the prospects of a cleaner world for all shine bright. We still have a long way to go and many challenges ahead, but it’s encouraging to see that the challenges are moving away from cost differentials to more practical issues such as adoption, scaling, and political will. From East to West and North to South, when it comes to energy, the people of the world increasingly speak the same language of sustainability.


Photo courtesy of Christopher Michel.
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