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08.08.2022 Feature Article

Global Renewable Energy Transition: What is the best Approach?

Global Renewable Energy Transition: What is the best Approach?
08.08.2022 LISTEN

As the years go by, the footprint of extreme weather conditions on lives and livelihood is exacerbating with the blight accelerating across all the regions of the world. While these recurring climatic events signify a looming cataclysmic crisis, germane measures could be undertaken to nip climate change in the bud. Evidently, if this course of action is executed effectively around the world, extreme weather events such as excessive precipitation, heatwaves and strong winds among several others, which are threatening lives and livelihood worldwide with millions of people being pushed into destitution every year, could be mitigated.

With limited time available to save lives and property, the prudent and most direct approach for policymakers, development organizations and relevant stakeholders is to commit adequate resources to address the root of the problem. Thankfully, researchers have carried an extensive root cause analysis and have identified the major driver of climate change. A report (2021) from the International Energy Agency (IEA) reveals that how energy is produced, transported and consumed is the main driver of climate change as the energy sector contributes about three-quarters of the world’s entire greenhouse gases. In short, the impact of the energy sector on climate change makes energy planning critical in attaining net-zero carbon emissions by 2050 and limiting global temperatures to preferably 1.5 °C.

To achieve these climate goals, countries are committing resources to transform how energy is produced, transported and consumed, shifting away from fossil fuel to clean energy. While countries around the globe are adopting varying approaches to expedite renewable energy transition it is important for these measures to be underpinned by evidence-based policies.

It is, however, incumbent on governments and development organizations to ensure that they invest adequately in research and innovation to promote renewable energy transition which is the surest pathway to effectively address climate change and also achieve sustainable development. This is mainly because investing in clean energy research and innovation is essential for advancing climate-resilient technologies and practices which significantly limit climate-driven disruptions in the energy sector and also enhances the transition from fossil-powered energy systems to renewable energy.

However, not many countries, particularly the developed countries, are investing appropriately to bolster clean energy research and development. For example, in 2019, when China invested US$83.4 billion in clean energy research and development, the highest for a single country, the United States, and Japan which were ranked second and third, invested US$55.5 billion and US$16.5 billion, respectively. Interestingly, two developing countries, India and Brazil, which were fourth and fifth on the ranking, invested US$9.3 billion and US$6.5 billion, respectively. Their share of investment allocated to advance clean energy research and development exceeds that of a host of developed countries which includes Australia, Netherlands, United Kingdom, Germany, France and Sweden which contributed US$5.6 billion, US$5.5 billion, US$5.3 billion, US$4.4 billion, US$4.4 billion, and US$3.7 billion respectively.

It appears that for countries that are investing massively in renewable energy research and development, the transition from fossil fuel which is harmful to the environment to clean energy is outstanding. Data from the market research company, Statista indicate the disparity in renewable energy transition between countries that in recent years are highly committed to strengthening clean energy research and development and countries that have taken entrenched positions not to invest adequately. It has to be said that even though the share of renewable energy sources in the global energy mix is rising, only a few countries are driving this growth – these are countries that are investing heavily in renewable energy research and development. In 2020, the country that installed the largest capacity of renewable energy was China. The country installed 895 gigawatts of renewable energy, to put this into perspective; China’s contribution exceeds the combined renewable energy capacity of the United States, Germany, Canada, Japan, Italy and France which accounted for 292 GW, 132 GW, 101 GW, 101 GW, 55 GW and 55 GW, respectively. Similarly, Brazil and India which invested more to advance clean energy research and development also installed larger renewable capacity than Germany, Canada, Japan, Italy and France. Clearly, the green energy transition approach, adopted by these developed countries together with other developing countries which prioritize modest investment in clean energy research and development is not in the best interest of the world. On the other hand, China’s approach to invest enormously into clean energy research and development to facilitate green energy transition is a step in the right direction.

To further elucidate why China’s approach to strengthen clean energy research and innovation is yielding tremendous impact and is indisputably the most assured pathway to accelerate global green energy transition, it is important to examine the intricacy of the world’s renewable energy patents a few years prior. In 2018, out of a total of 13,160 renewable energy patents that were filled worldwide, China alone accounted for more than half, representing 7,544 patents. While the rest of the world filed for a total of 2,897 patents, the combined patents of the United States, Germany and Japan which were second (2059) , third (571), and fourth (89), respectively is far less than China’s contribution. These renewable energy patents have been instrumental in scaling up the production of climate-resilient technologies and advancing clean energy infrastructure development which is escalating both the country’s renewable energy transition and that of the entire world.

To buttress this claim, a recent (2021) joint report from the International Renewable Energy Agency (IRENA) and the International Labour Organization (ILO) shows that amidst the disruption created by COVID-19, global renewable energy jobs increased from 11.5 million in 2019 to 12 million in 2020. China alone accounts for 39 percent of the world’s total which represents 4.7 million jobs, the highest for a single country. For several years, China’s domestic companies have accounted for more than 90 percent of the country’s renewable energy installations – this indicates the extent to which clean energy research and innovation together with other pertinent policies are empowering local manufacturing industries to propel renewable energy transition.

At this point, it is undoubtedly clear that committing adequate resources to advance clean energy research and innovation is the safest and the most reliable means of saving the earth from the deleterious impact of climate change and also achieving sustainable development. Therefore it is of utmost importance for all countries to cooperate with China, which is the global leader in renewable research and development to push global green energy transition in a collective effort to effectively address climate change.

Alexander Ayertey Odonkor is an economic consultant, chartered economist and a chartered financial analyst with a keen interest in the economic landscape of countries in Asia and Africa.

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