A new economic narrative (part two)

Read part one, where Jeremy Rifkin opens the door to a post-carbon future

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Morgan Bazilian and Kandeh K. Yumkella see unique opportunities arising from the creation of a radically different energy system

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Jeremy Rifkin cites numerous interacting crises as the impetus for a new economic narrative, which he terms the “Third Industrial Revolution”. He sees the seeds of this narrative in the confluence of “new communication technologies [and] new energy systems”. The label, “Third Industrial Revolution”, is indeed attractive from a number of perspectives. It helps to form in the mind an image of the potential transformative power of the communication/energy nexus. Others have begun to use it too. In October 2011, Christiana Figueres, the Director of the UN Framework Convention on Climate Change (UNFCCC), used the phrase to help motivate the business community to take action on climate change. She described it in this way:

UNIDO Director-General, Kandeh K. Yumkella | Photo: UNIDO

“A low-carbon economy necessitates a multifaceted paradigm shift across a broad spectrum, from individual behaviour to national policies. But let me assure you that the shift will not be a clean straight line. We are barely putting in the foundations of the new economy. We are constructing it, and all construction sites are messy.”

The First Industrial Revolution was not premeditated as an inclusive, global movement that would bring prosperity to all. While it brought untold technologies and unimagined riches, it also left in its trail an unhappy history of inequity and exploitation of both people and natural resources. The advances of the past century have led to a world more interdependent than ever in terms of trade, finance and movement of labour, yet the great unfairness remains: the First and Second Industrial Revolutions were not designed with the poor in mind. Clearly, therefore, in transitioning to a new economy, based on a radically different energy system, we have the unique opportunity to make the next industrial revolution an inclusive one.

Sustainable Energy for All

Let us examine in more detail the critical role of energy in the next industrial revolution. Energy powers human progress, from job generation to economic competitiveness. From strengthening security to empowering women, energy is the great integrator, it cuts across all sectors, and lies at the heart of all countries’ core interests. Now more than ever, the world needs to ensure that the benefits of modern energy are available to all and that energy is provided as cleanly and efficiently as possible. This is a matter of justice, first and foremost, but it is also an issue of urgent, practical importance – and this is the impetus for the UN Secretary-General’s new Sustainable Energy for All initiative.

The initiative can be viewed as a firm commitment by the UN and its partners to make sure the next industrial revolution is powered for the poor, not by the poor. It has been launched in a time of great economic uncertainty, great inequity, high urbanization and high youth unemployment. But it is also a time when there is finally an emerging consensus on the need to act cohesively towards global issues such as sustainable development. We are not, however, starting from scratch. New technologies ranging from improved photovoltaic cells, to advanced metering, to electric vehicles and smart grids, give us a strong foundation on which to build. How we capture these opportunities for wealth and job creation, for education and local manufacturing, will be the key to unlocking any real revolution.

Three linked objectives underpin the goal of achieving Sustainable Energy for All by 2030:

  • Ensuring universal access to modern energy services – access to electricity and to modern fuels and technologies for cooking, heating, and productive uses.
  • Doubling the rate of improvement in energy efficiency – increasing the current pace of improvement to 2.5% per year, achieving a 40% reduction by 2030, measured in terms of global energy intensity.
  • Doubling the share of renewable energy in the global energy mix – increasing the current renewable energy share of global energy consumption to 30%.

These three objectives are mutually reinforcing. Increasingly affordable renewable energy technologies are bringing modern energy services to poor rural communities where extension of the conventional electric power grid would be prohibitively expensive and impractical. More efficient devices for lighting and other applications require less energy, and thus reduce the amount of power needed to support them. Increased efficiency in the production and use of electricity relieves strained power grids, allowing them to stretch further and reach more households and businesses.

Photo: iStock

Does this sound far-fetched? Consider the alternative: unconstrained expansion of today’s conventional fossil fuel-based energy systems, locking in a long-term infrastructure commitment to an unsustainable emissions path for the world’s climate.

An action agenda

The UN Secretary-General has formed a high-level group to design an action agenda and provide momentum to the goal of providing Sustainable Energy for All. This will require catalyzing action from a broad array of stakeholders to help meet its stated objectives by 2030. The Secretary-General, in an input to the 2012 UN Conference on Sustainable Development (Rio+20) process, described the Initiative as follows:

“At Rio+20 we will ask all stakeholders to make a global commitment to achieving Sustainable Energy for All by the year 2030. Reaching this goal will require action by all countries and all sectors to shape the policy and investment decisions needed for a brighter energy future. Industrialized countries must accelerate the transition to low-emission technologies. Developing countries, many of them growing rapidly and at large scale, have the opportunity to leapfrog conventional energy options and move directly to cleaner energy alternatives that will enhance economic and social development.”

The action agenda will be a “living document” that establishes clear actions and commitments over time that will dramatically shift current energy pathways onto new trajectories that will:

  • establish firm political commitment
  • create stable policy and regulatory frameworks
  • finance the transformation
  • strengthen local capacity and forge global partnerships
  • ensure accountability and transparent reporting
  • strengthen the analytical foundation
  • disseminate information

Within the UN system we are working closely through the UN-Energy mechanism, which is fostering new partnerships and better communication, and facilitating effective action on the ground. We want the UN to bring the energy benefits of the next industrial revolution to all parts of the globe.

Green economy and green industry

In the run-up to Rio+20, there is growing agreement that in a resource and carbon-constrained world any Third Industrial Revolution should be rooted in a green economy. However, such a shift cannot be made at the expense of the developmental priorities of developing countries, and any definition of ‘green economy’ will need to provide diverse opportunities for both economic development and poverty alleviation.

In response to these challenges, UNIDO created its ‘Green Industry Initiative’, which aims to accelerate the green growth of the manufacturing and related sectors. It provides the international community and national governments with a platform to foster the positive role of industry in achieving sustainable development. ‘Greening’ industrial development is thus an integral pillar of the ‘green economy’ concept, as it provides a framework for developing countries to ‘green’ their industrialization process and to promote businesses that provide environmental goods and services. A holistic framing of the global energy issue is required to underpin this work.

While these issues resonate in both developed and developing economies, the impact on the Least Developed Countries is a matter of which we are acutely aware. Even within these countries, good precedents for national action exist: Rwanda and Ethiopia are prime examples. These countries are putting together sophisticated national plans to address sustainability issues for the entire economy.

For a model of transformative change that has reached every corner of the world, we can look to the mobile phone and the ICT sector. This precedent is now influencing the possibilities for smart grids, even in the most remote corners of the world. In the future, “Smart and Just Grids” for developing countries could provide similar functionality to smart grids in industrialized countries, even though they are likely to follow a different pathway and timeframe. This will require attention to constraints, such as lack of good governance, limited investment capital, largely inadequate infrastructure and lack of well-trained power sector personnel. Such impediments are most likely stifling innovative practices that could already be occurring organically in developing countries. For the next industrial revolution to take hold, these must be overcome.

The massive electricity infrastructure requirements to reach universal access offer a unique opportunity to learn from the nexus between ICT and energy systems, and move forward without necessarily repeating all previous development stages.

An important year

The UN General Assembly named 2012 as the International Year of Sustainable Energy for All, thus placing energy at the heart of the multilateral process. It is an enormous opportunity to share models that work, are scalable, and can help fill gaps in existing funding or capacity. It is also a chance to ensure that the political momentum currently focused on this area is maintained.

We must do considerably more than scratch the surface if we want to make the new industrial revolution an inclusive and sustainable one. This will mean commitment from many different stakeholders. On the energy side, emerging partnerships, such as the Norwegian Energy+ and the UN-Energy/Global Sustainable Electricity Partnership, offer conduits for multi-stakeholder engagement and dialogue, as well as for real action on the ground. Meanwhile, Rio+20 offers UN member states and agencies the opportunity to reframe the very concept of development in the context of sustainability and green growth, with an eye on global commitments beyond 2015. The Third Industrial Revolution starts here.

● Read part one, where Jeremy Rifkin opens the door to a post-carbon future

Morgan Bazilian is the Special Advisor to the Director-General of the United Nations Industrial Development Organization (UNIDO) on international energy and climate policy. In this role, he helps shape the United Nations approach to energy for development. Previously, he served as Senior Advisor on energy and climate change to the Irish energy minister. He has been the lead climate change negotiator for the European Union on low-carbon technology, and a member of the UNFCCC’s Expert Group on Technology Transfer.

Kandeh K. Yumkella is the Director-General of UNIDO. He is also Chair of UN-Energy and Co-chair of the High-level Group on Sustainable Energy for All, consisting of 46 global leaders in business, finance, government and civil society. Previously, he served as Chair of the UN Secretary-General’s Advisory Group on Energy and Climate Change. Prior to joining UNIDO, he served as Minister of Trade, Industry and State Enterprises for the Republic of Sierra Leone.

A new economic narrative

In a two-part keynote, Jeremy Rifkin opens the door to a post-carbon future, while Kandeh K. Yumkella and Morgan Bazilian explore the challenges of inclusivity.