Global summit approves policy recommendations to promote renewables

BONN, Germany, 2004-06-16 Refocus Weekly Renewable energies are a "critical element" for achieving sustainable development, and development and diffusion of renewables "will help realize important economic, environmental and social objectives in the early decades of the 21st century," according to the policy recommended and accepted at the renewable energy conference in Germany.

The document, ‘Policy Recommendations for Renewable Energies,’ was one of the key outcomes of the conference and was based on the "current understandings on policies and decision-making designed to promote renewable energies." The diversity of challenges, resource opportunities and market conditions among countries implies that different approaches are required, the preamble states, and the non-binding recommendations "provide decision-makers with a menu of policy options based on available experience and knowledge."

"The benefits provided by renewables will differ among and within countries, depending on the local situation, options and concerns," including "enhanced security of energy supply, reduced threat of climate change, stimulation of economic growth, jobs creation (often in rural areas), higher incomes, poverty reduction, improved social equity, and protection of the environment at all levels." Technologies exist to tap the renewable energy flows at costs that are often competitive with conventional energy sources if the evaluation includes external costs and benefits, and subsidies to conventional energies are eliminated.

As developing countries expand their energy systems and industrialised nations replace their systems to meet rising demand, "societies face a unique opportunity over the next few decades to increase investments in renewable energies," it notes. Over the next 30 years, global investments in energy-supply infrastructure are expected to be US$16 trillion.

"The opportunity is to orient a large and increasing share of these investments towards renewable energy, in order to advance the transition to a global energy system for sustainable development," it suggests. "If these investments continue as business as usual, mostly in conventional energy, societies will be further locked into an energy system that is incompatible with sustainable development and that further increases the risks of climate change."

The priority is for decision-makers in government and the private sector to "undertake the necessary actions to incorporate the goals of sustainable development into their policies," and the document identifies three main areas for renewables as the establishment of policies for renewable energy markets, expanding financing options and developing the capacity required.

"A sustainable future can be achieved only if markets function effectively and efficiently," and in the long term, "it is essential to establish a level playing field in the energy market, free of subsidies, and to internalize external costs," it notes. The two major conditions that bias current markets against renewables are subsidies to conventional energies and a lack of accounting for external costs in market conditions, especially prices.

Global subsidies for conventional energies are estimated at $200 billion a year, which makes it "significantly more difficult" for renewables to increase market share and attain the necessary economies of scale. External costs for health, safety, security and environmental are "typically much larger for conventional energies than for renewable energies, and the limited accounting of these costs in the market place works strongly against renewables."

"At the same time, renewables provide benefits that are not reflected in energy policies and market conditions, including increased employment, reduced import dependence, and reduced burdens on foreign exchange," it adds. "The market place should be corrected to reflect the full costs and benefits of all energy options" under the process referred to as a ‘level playing field.’

Most countries lack the enabling policy framework required to advance renewables, and clear targets create an environment that is conducive for long-term investments and provide planning certainty for stakeholders and consumers. No single policy instrument is appropriate for every application or energy carrier, and an "appropriate and effective mix of policy instruments becomes essential" for many renewable energy technologies.

"Heating and cooling are often neglected in energy policies, but they represent a large share of energy consumption in most countries," it concludes. "Increased use of renewable energies in buildings offers significant economic potential."


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