By Deepali Khanna
The Covid-19 crisis has upended the global development agenda. Within a year and a half since it began, the pandemic has set back over 25 years of progress. As it continues unabated, the situation becomes even more dire for marginalized sections of the population. Progress towards the United Nations Sustainable Development Goals (SDGs) has not only stopped but regressed in every significant indicator. Extreme poverty has increased by 7%, and more than 420 million people have been pushed deeper into an expanded global poverty line. Millions of workers have lost their jobs in developing countries – the ILO estimates that 255 million full-time equivalent jobs were lost in 2020. The worst hit have been the most marginalized groups, which includes young people, women, and low-paid and low-skilled workers. While we look to build back from the pandemic, it is necessary for us to ensure that sustainability and climate-action are an integral part of the recovery.
Despite a slowdown in economic activity in 2020 which resulted in decreased carbon emissions globally, a recently released report by the United Nation’s Intergovernmental Panel on Climate Change (IPCC) has predicted that the planet is experiencing climate change at a faster rate than previously anticipated. Described as a “code red for humanity”, the report warns that global temperatures will likely rise by 1.5 degrees Celsius by 2040 if warming continues at the current rate. Considering this, it is essential for us to focus on technologies and models that can aid a green and equitable recovery.
To achieve this, we need to focus on renewable energy and its potential to create jobs that can lift people out of poverty and build sustainable communities. Over the past decade, renewable power generation technologies have rapidly displaced fossil fuels as the most cost-effective building blocks for economic development, and their prices are decreasing further. Distributed renewable energy (DRE) has become a faster, nimbler, and more cost-effective solution for driving inclusive growth and reaching underserved populations. According to the International Renewable Energy Agency (IRENA), DRE have extraordinary growth potential, especially in low-income countries.
To meet the climate agenda while ensuring that people continue to have access to energy, it is critical to ensure that we are creating new jobs across the value chain. In the process of setting up DRE projects, direct jobs are created across verticals such as design, engineer, and operational and maintenance work. According to Transforming A Billion Lives: The job creation potential from a green power transition in the energy poor world, a report by The Rockefeller Foundation, with analysis from Catalyst Off-Grid Advisors, and review by IKEA Foundation, The International Renewable Energy Agency, Sustainable Energy for All, and the International Solar Alliance there needs to be an investment of $130 billion per annum over the coming decade in DRE. This will result in the creation of 25 million new jobs in the power sector itself, which is more than 30 times the number of jobs that would be created by a comparable investment in fossil fuels. In India alone, 14.4 million direct jobs can be created (43% of the global total) by 2030. Furthermore, the DRE pathway saves 4.2 billion tons of CO2 by 2030, which is roughly equivalent to total emissions from the EU’s 28 Member States in 2020.
Moreover, DRE creates downstream benefits by enabling productive use, which helps in the creation of indirect jobs supported across various sectors such as agriculture, education etc. Investments into DRE projects can help in creating around 500 million new jobs and almost 700 million jobs would be improved across the globe, with India accounting for a massive 191 million of new jobs created, and 263 million jobs improved by 2030.
DRE also advances gender inclusion, creates enterprise opportunities, and creates avenues for women to participate in the workforce, especially in regions like Asia and Africa. Scaling investments in DRE can help economies tap the economic potential of women and yield a “gender dividend”, which will help countries reap social and economic development benefits over the long term. A recent success in this domain was seen in Nigeria, where carefully targeted DRE investments in the milk preservation sector resulted in an increase of income by 17% for women, compared to 10% for men. With large scale investment into such projects, these benefits can be enhanced multi-fold.
To catalyze investment into DRE, statespersons, philanthropists, business leaders and development sector champions need to come together to build an alliance that supports a comprehensive electrification effort based on clean, reliable power. To this end, The Rockefeller Foundation is bringing together preeminent philanthropic, governments, donors, MDB, DFI, and private sector partners to build the global platform to accelerate a just energy transition in developing and emerging economies. As we approach COP26 and world leaders meet to discuss a collective course of future climate action, it is imperative that we focus on ensuring that the gains of development are equitably distributed. By coming together to fight climate change through DRE, we can generate jobs and end energy poverty, while transforming the lives of a billion people.
(The columnist is Managing Director, Asia Regional Office (ARO), The Rockefeller Foundation. Views expressed are the author’s own.)