How to make clean, affordable energy available to everyone

Hot on the heels of COVID-19, the world faces more turmoil. This year, Davos 2022 aptly focused on the tragic war in Ukraine and its ripple effect on global finance, food, and energy systems. The current state of the world reminds us to what degree energy underpins our aspirations for a more sustainable future for all - and how broken the global energy system is.

The energy sector accounts for three-quarters of human-caused greenhouse gas emissions, making it the leading driver of the climate crisis. The current geopolitical context is incentivizing some countries to revert to this dirty diet. Meanwhile, existing energy systems fail to deliver. Close to 1 in 10 people – 733 million people globally – still lack access to electricity, locking them into poverty and out of the opportunities it brings. One-third of the world still relies on polluting fuels for cooking and heating their homes at significant health costs. Unfortunately, the COVID-19 pandemic has slowed progress towards universal access to electricity. Without decisive action, 670 million people will remain without electricity by 2030 – 10 million more than projected last year.

The war in Ukraine is compounding inequalities with fuel and food prices soaring to record levels. This is without counting the looming debt crisis that leaves low-income countries with little to spend on social protection to cushion these shocks.

Solutions discussed at the World Economic Forum Annual Meeting 2022 showed that we can reach a net-zero global energy target while providing access to energy to everyone currently without it. We do not have to choose. We must and can do both at the same time. However, for this to happen, all countries need to re-set their energy systems with people at their centre to ensure cleaner, more secure, more resilient, and more affordable energy for all. This transformation relies on three pillars.

We spent decades arguing that decarbonising our economies constrained development. Now development through decarbonisation is poised to become humankind’s greatest driver of economic progress and also a re-awakening about how to live in harmony with our planet.

To this end, the international community must provide countries with the tailored support and cutting-edge tools and technology they need to drive a just energy transition to clean energy that works for their economies. That includes assisting the fossil fuel industry to shift to new green jobs. Globally, it will bring concrete socio-economic and welfare benefits, adding 85 million green jobs by 2030.

Achieving universal access to electricity will require between $35 billion and $40 billion every year up to 2030. At the same time, the global net income from oil and gas production in 2022 is anticipated to be nearly $2 trillion higher than in 2021 and two-and-a-half times the average of the past five years. Our road towards a clean energy future and greater energy security could be paved with these funds if they were invested in net-zero societies built on innovative energy systems. Indeed, many investors are at risk of stranded assets if they continue to invest in the fossil fuel industry.

For energy access and the energy transition to boost prosperity and leave no one behind, we urgently need to increase capital flows to developing economies. For instance, Africa, where roughly 600 million people lack electricity, only received 2% of global investments in renewable energy in the last two decades.

We need to crowd-in public and private finance by creating environments that de-risk clean energy investments by working with governments to help them implement the policies and regulations and that bring the finance to all countries, not just a few selected ones. Organizations such as the United Nations Development Programme (UNDP) have the policy expertise and on-the-ground networks to provide tailored, context-specific technical assistance to governments to put these enabling environments in place.

UNDP has set an ambitious aspiration to help mobilise $1 trillion in public and private investment towards the Sustainable Development Goals over the next four years, including towards clean energy by 2025.

The energy transition must be built on investment in new technologies and innovation; novel business models; and ground-breaking financial mechanisms.

To this end, there is a pressing need for new partnerships and more multilateral engagement to advance the sheer scale of what lies ahead. For example, through its Sustainable Energy Hub, UNDP aims to catalyse solutions-driven partnerships that will help to provide clean, affordable energy to 500 million additional people over the next four years.

It also means supporting key areas like standards and certification, regulatory frameworks, research, and innovation faster and bigger than ever before. And a comprehensive set of cross-cutting, structural policies covering all technological avenues and energy transition objectives is needed to achieve game-changing deployment of clean energy technologies.

Davos 2022 has a unique ability to bring together global leaders who, if they would align on priority actions, can make a difference. Alliances and partnerships between multilateral organizations, the private sector, and governments will drive the energy transition at this historic tipping point.

In many ways, the decisions that major emitting countries make over the next months and years will decide the fate of people and planet. Crucially, providing support to developing countries so that they can be part of the clean energy revolution should not be a choice that needs a long deliberation. It is the only way to decisively slow the steady march of climate change, lifting hundreds of millions of people out of poverty and ensuring that our world does not struggle from this unprecedented global turmoil to an even bigger one.