The developing world may suffer a double whammy. Advanced nations, such as the European Union and the United Kingdom, would be squeezing them by applying stringent sustainability measures having trans-border implications. At the same time, the withdrawal of the US will not only unfetter emissions in that country but will remove the developing world’s access to financial and technological resources, which could have been available to them had the US continued to be a member. The US withdrawal would also dampen the spirit of other countries in achieving their climate goals.
Can there be an alternative? One option could be a peaceful co-existence of energy systems (including both fossil fuels and renewables), reinforcing the principle of path-dependency with major players exerting their political power to maintain the status quo. The seeds of this approach were sown in the Baku declaration, establishing a United Nations-managed carbon-credit mechanism and developing carbon-credit standards, including technologically neutral carbon-removal activities, for global carbon-credit markets under Article 6.4 of the Paris Agreement.
This co-existence of energy systems may also have a greater appeal to many nations, including the US, which has major economic interests in fossil fuels after the arrival of fracking technology, turning it a net exporter. It, however, needs to be recognised that promoting fossil fuel-based energy systems without pushing carbon capture, utilisation and storage, and removal technologies will only be a reiteration of business as usual. These technologies are at an early stage of development. They would require significant investment and a policy push. The Baku decision will give a boost to their development and application on a wider scale.
The co-existence of energy systems appears more appealing, too. It is impossible to have a 100 per cent energy system based on renewable sources because of their variability unless the grid-level energy storage batteries are developed at competitive prices and the supply chain of green hydrogen is developed at scale and at an affordable cost. Though the economic feasibility of renewables, especially solar panels, has been addressed to a great extent, thanks to the development of technology and China’s industrial policy, it is still costly for developing countries to prematurely dismantle their existing fossil fuel-based energy systems and shift to renewable sources in a significant way. It may be worthwhile to continue with the full life of existing plants fitted with carbon-removal technologies and gradually increase the contribution of renewable energy. The carbon removed would be counted in the calculation of countries’ “nationally determined contributions” and excess removal can be converted into credits. Once carbon-removal technologies are mature enough to be economically viable, this approach will align more with the basic rule of ”common but differentiated responsibility with respective capabilities”, the bedrock of the Paris Agreement and other environmental pacts.
Developing countries may get some pragmatic respite by conditioning their energy transition in tune with their development plans. India can continue longer with its coal-fired power plants retrofitted with carbon-capture equipment. It can retire them when renewable sources with grid-level storage facilities become more economically viable. The same way least developed countries (LDCs), those endowed with fossil fuels, may have a higher proportion of fossil fuel-based systems (fitted with carbon-capturing equipment). Others, with no fossil fuels, can go directly to having systems based primarily on renewable sources (both grid and off-grid ones).
This approach, however, would entirely depend on how soon carbon capture, utlilisation and storage (CCUS), and removal technologies are available for commercial exploitation. At present, significant work in this direction is missing. There is a need to carry out more research and development (R&D) in the entire value chain — ranging from capturing technologies to using the carbon captured, and then transporting the captured carbon to safe storage sites and geology of sites to make the storage fully safe and secure for a long time. Including carbon removal in the global carbon-credit scheme will give a boost to R&D in all these segments. However, the governments needs to make favourable policies. Financial and technical resources will have to be made available on a global scale, reiterating the strong need for the developed world to enhance the pace of R&D and availability of financial resources. Some successful examples of CCUS include the Boundary Dam Power Station (Canada), Gorgon Project (Australia), and Petra Nova (US). It should not be the intention of public policy to supplant renewable energy but only to supplement where economically viable carbon-capture technologies, as they develop, can be suitably deployed.
US President Donald Trump’s return on the world stage is a reality. Making the best use of the existing circumstances is a positive and constructive way to deal with the situation. Fortunately, it also appears more pragmatic.
The authors are, respectively, distinguished fellow and consultant with Research and Information System for Developing Countries. The views are personal
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