From 27 to 28 May 2019, Bratislava hosted the Second Preparatory Meeting of the 27th Economic and Environmental Forum of the Organization for Security and Cooperation in Europe (OSCE EEF) on “Promoting economic progress and security in the OSCE area through energy cooperation, new technologies, good governance and connectivity in the digital era”.
As part of my work on digitalization in Greater Eurasia, I was particularly interested in attending this meeting.
A major part of the event was devoted to questions surrounding energy security, which is a very important factor of cooperation in the OSCE area. All 57 participating states across North America, Europe, and Asia are interested in stable energy supply. Doing energy right is a way to promote progress, security, and prosperity. Orientation towards sustainable development, limiting the use of conventional energy sources, oil conflicts, and cyber attacks make both energy demanders and suppliers search for new solutions. In this regard, the use of renewable resources promises long-term benefits in terms of energy efficiency, new jobs, as well as a secure and resilient energy sector. This is however not possible without peace, which makes the protection of infrastructure crucial. There is no prosperity without peace and no peace without prosperity.
I found it particularly valuable that new technologies were included in the discussion. Blockchain – a system in which a record of transactions made in bitcoin or another cryptocurrency are held across several computers that are linked in a peer-to-peer network – along with big data, are creating new opportunities in the energy sector, for example, in terms of new forms of energy trading. However, they can also pose some risks as they create certain dependencies, thus raising questions of sustainability. For instance, automated driving raises many regulatory issues on how to ensure against cyber attacks and missiles, or how to divide responsibilities between producers and users. Advanced technologies have to be employed safely and efficiently. International organizations could play a vital role in enacting common standards and regulatory norms for digitalization and connectivity in this regard. One grand example here is the single window recommendation, which is a trade facilitation idea that enables international traders to submit regulatory documents at a single location. The idea is that such a system would facilitate trade through good governance.
The establishment of regional communication platforms and the development of science, research, and innovations are of particular importance. Key agents need to talk about secure and clean energy. This could be achieved through intra-institutional cooperation and inclusive dialogue. I believe that institutions like IIASA can play a huge role here.
Talking about new technologies, it is an important task to conduct studies on barriers to trade, especially in the context of blockchain and machine learning technologies in digital trade in order to detect inefficiencies at borders and improve market access. In the energy field, there are many controversial estimates (simultaneously in favor of conventional and renewable energy sources), which also make independent reputable studies essential.
Nadejda Komendantova, a researcher with the Advanced Systems Analysis Program at IIASA also represented the institute at the OSCE meeting, where she moderated a session on protecting energy networks from natural and man-made disasters. The sessions’ participants discussed the impact of these factors on energy security, analyzed opportunities and threats for secure energy networks connected with new technologies, raised questions of resilience, and talked about the mitigation of threats through effective policies and cooperation. The OSCE Critical Energy Infrastructure Protection (CEIP) Digital Training Platform was presented during the session.
To conclude, I would like to emphasize that we need more such constructive and fruitful discussions to catalyze trust, growth, security and connectivity. Partnerships create political will and make open dialogue and mutual support very important. I believe that organizations like IIASA are key to making this possible.
By Pallav Purohit, researcher with the IIASA Air Quality and Greenhouse Gases Program
More than 300 million people in Hindu Kush Himalaya-countries still lack basic access to electricity. Pallav Purohit writes about recent research that looked into how the issue of energy poverty in the region can be addressed.
The Hindu Kush Himalayas is one of the largest mountain systems in the world, covering 4.2 million km2 across eight countries: Afghanistan, Bangladesh, Bhutan, China, India, Myanmar, Nepal, and Pakistan. The region is home to the world’s highest peaks, unique cultures, diverse flora and fauna, and a vast reserve of natural resources.
Ensuring access to affordable, reliable, sustainable, and modern energy for all – the UN’s Sustainable Development Goal (SDG) 7 – has however been especially elusive in this region, where energy poverty is shockingly high. About 80% of the population don’t have access to clean energy and depend on biomass – mostly fuelwood – for both cooking and heating. In fact, over 300 million people in Hindu Kush Himalaya-countries still lack basic access to electricity, while vast hydropower potentials remain largely untapped. Although a large percentage of these energy deprived populations live in rural mountain areas that fall far behind the national access rates, mountain-specific energy access data that reflects the realities of mountain energy poverty barely exists.
Source: Wester et al. (2019)
The big challenge in this regard is to simultaneously address the issues of energy poverty, energy security, and climate change while attaining multiple SDGs. The growing sectoral interdependencies in energy, climate, water, and food make it crucial for policymakers to understand cross-sectoral policy linkages and their effects at multiple scales. In our research, we critically examined the diverse aspects of the energy outlook of the Hindu Kush Himalayas, including demand-and-supply patterns; national policies, programmes, and institutions; emerging challenges and opportunities; and possible transformational pathways for sustainable energy.
Our recently published results show that the region can attain energy security by tapping into the full potential of hydropower and other renewables. Success, however, will critically depend on removing policy-, institutional-, financial-, and capacity barriers that now perpetuate energy poverty and vulnerability in mountain communities. Measures to enhance energy supply have had less than satisfactory results because of low prioritization and a failure to address the challenges of remoteness and fragility, while inadequate data and analyses are a major barrier to designing context specific interventions.
In the majority of Hindu Kush Himalaya-countries, existing national policy frameworks currently primarily focus on electrification for household lighting, with limited attention paid to energy for clean cooking and heating. A coherent mountain-specific policy framework therefore needs to be well integrated in national development strategies and translated into action. Quantitative targets and quality specifications of alternative energy options based on an explicit recognition of the full costs and benefits of each option, should be the basis for designing policies and prioritizing actions and investments. In this regard, a high-level, empowered, regional mechanism should be established to strengthen regional energy trade and cooperation, with a focus on prioritizing the use of locally available energy resources.
Some countries in the region have scaled up off-grid initiatives that are globally recognized as successful. We however found that the special challenges faced by mountain communities – especially in terms of economies of scale, inaccessibility, fragility, marginality, access to infrastructure and resources, poverty levels, and capability gaps – thwart the large-scale replication of several best practice innovative business models and off-grid renewable energy solutions that are making inroads into some Hindu Kush Himalayan countries.
This further highlights an urgent need to establish supportive policy, legal, and institutional frameworks as well as innovations in mountain-specific technology and financing. In addition, enhanced multi-stakeholder capacity building at all levels will be needed for the upscaling of successful energy programs in off-grid mountain areas.
Finally, it is important to note that sustainable energy transition is a shared responsibility. To accelerate progress and make it meaningful, all key stakeholders must work together towards a sustainable energy transition. The world needs to engage with the Hindu Kush Himalayas to define an ambitious new energy vision: one that involves building an inclusive green society and economy, with mountain communities enjoying modern, affordable, reliable, and sustainable energy to improve their lives and the environment.
 Dhakal S, Srivastava L, Sharma B, Palit D, Mainali B, Nepal R, Purohit P, Goswami A, et al. (2019). Meeting Future Energy Needs in the Hindu Kush Himalaya. In: The Hindu Kush Himalaya Assessment. pp. 167-207 Cham, Switzerland: Springer. ISBN 978-3-319-92287-4 [pure.iiasa.ac.at/15666]
By Lu Liu, postdoctoral research associate at Rice University, USA and IIASA YSSP 2016 participant
I have been attending the American Geophysical Union (AGU) Fall Meeting since 2013 when I was working with the Joint Global Change Research Institute. Ever since then, the AGU Fall Meeting has become one of my most anticipated events of the year where I get to share my research and make new friends.
The first time I attended the AGU Fall Meeting, I was overwhelmed with the size and scale of this conference. There are more than 20,000 oral and poster presentations throughout the week, and the topics cover nearly 30 different themes, from earth and space science, to education and public affairs. I was thrilled to see my research being valued and discussed by people from various backgrounds, and I was fascinated by other exciting research and rigorous ideas that emerged at the meeting.
Lu Liu at 2018 AGU poster session
At this year’s AGU, I presented my poster Implications of decentralizing urban water supply infrastructure via direct potable water reuse (DPR) in a session titled Water, Energy, and Society in Urban Systems. In a nutshell, my poster presents a quantitative model that evaluates the cost-benefits of direct potable water reuse in a decentralized water supply system. The concept of decentralization in an urban water system has been discussed in previous literature as an effective approach towards sustainable urban water management. Besides the social and technical barriers in implementing decentralization, there is a lack of analytical and computational tools necessary for the design, characterization, and evaluation of decentralized water supply infrastructure. My study bridges the gap by demonstrating the environmental and economic implications of decentralizing urban water infrastructure via DPR using a modeling framework developed in this study. The quantitative analysis suggests that with the appropriate configuration, decentralized DPR could potentially alleviate stress on freshwater and enhance urban water sustainability and resilience at a competitive cost. More about this research and my other work can be found here: https://emmaliulu.wixsite.com/luliu.
At the AGU Fall Meeting, I engaged in various opportunities to reconnect with old colleagues and build new professional relationships. What’s better than running into my former YSSP supervisors and IIASA colleagues after two years since I left the YSSP? Although my time spent at IIASA was short, I hold IIASA and the YSSP very close to my heart because the influence this experience has had on my professional and personal life is profound.
I will continue to attend the AGU Fall Meeting for the foreseeable future. After all, we all want to feel a sense of belonging and acceptance in a community, and I am glad I already found mine.
Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
By Sandra Ortellado, IIASA Science Communication Fellow
When it comes to home cooking in rural India, health, behavior, and technology are essential ingredients.
Consider the government’s three-year campaign to reduce the damaging impacts of solid fuels traditionally used in rural households below the poverty line.
Initiated by the Ministry of Petroleum and Natural Gas, a program called Pradhan Mantri Ujjwala Yojana (Ujjwala) aims to safeguard the health of women and children by providing them access to a clean cooking fuel, liquid petroleum gas (LPG), so that they don’t have to compromise their health in smoky kitchens or wander in unsafe areas collecting firewood.
According to the World Health Organization, smoke inhaled by women and children from unclean fuel is equivalent to burning 400 cigarettes in an hour.
Nevertheless, an estimated 700 million people in India still rely on solid fuels and traditional cooking stoves in their homes. A subsidy of Rs. 1600 (US $23.47) and an interest free loan attempts to offset the discouraging cost of the upfront security deposit, the stove, and the first bottle of LPG, but this measure hasn’t been able to change habits on its own.
Why? Although the government has made an overwhelming effort to increase access, interconnected factors like cultural norms, economic trade-offs, and convenience require an in-depth analysis of human behavior and decision-making.
That’s why Abhishek Kar, a researcher in the IIASA Energy Program and a participant in the 2018 Young Scientists Summer Program (YSSP), has designed a study to explore how rural households make choices about access and usage. Borrowing from behavior change and technology adoption theories, he wants to know whether low-cost access is enough incentive for Ujjwala beneficiaries to match the general rural consumption trends, and more importantly, how to translate public perception into a behavior change.
“I think it’s really important to look into the behavioral aspect,” said Kar in an interview. “If you ask someone if they think clean cooking is wise they may say yes, but if you say do you think it is appropriate for you? The moment it becomes personalized the answers can vary.”
Kar knows that although more than 41 million LPG connections have been installed, installment of the connection does not necessarily equate to use. By gathering data on LPG refill purchases and trends, along with surveys that identify biases in the public’s perception, he wants to know how to convince rural BPL households to maintain the habit of using LPG regularly, even under adverse conditions like price hikes. If LPG is used only sporadically, LPG ownership won’t significantly reduce risk for some household air pollution (HAP)-linked deadly diseases, like lower respiratory infections and stroke.
Unfortunately, even the substantial efforts the government has made to improve LPG supply has not changed the public’s perception of its accessibility in the long term, nor its consumption patterns in the first two years. At least four LPG refills per year would be needed for a family of five to use LPG as a primary cooking fuel, which is not currently happening for the majority of Ujjwala customers.
Because the majority of Ujjwala beneficiaries have cost-free access to solid fuels from forest and agricultural fields, there is less incentive for these families to use LPG regularly instead of sporadically. Priority households for Ujjwala, especially those with no working age adults, are often severely economically disadvantaged and can’t afford to buy LPG at regular intervals.
Furthermore, unlike LPG, a traditional mud stove is more versatile and can serve dual purposes of space heating and cooking during winter months. Many prospective customers are also hesitant about the inferior taste of food cooked in LPG, the utility of the mud stove’s smoke as insect repellent, and the trade-off of expenses on tobacco and alcohol with LPG refills.
As per past studies, even the richest 10% of India’s rural households (most with access to LPG) continue to depend on solid fuels to meet ~50% of their cooking energy demand. This suggests that wealth is not the only stumbling block in the transition process.
“Whatever factors matter in the outside world, my working hypothesis is that every decision is finally mediated through a person’s attitude, knowledge, and perceptions of control,” said Kar. According to Kar, interventions can be specifically targeted to address factors that are perceived negatively either by informing people or doing something to improve that factor. Nevertheless, developing effective interventions is no simple task.
Even with a background in physics and management and eight years of experience helping people transition from one technology to another, Kar says he is grateful to have the input of a variety of scholars at IIASA, each with a different perspective and a different set of core skills and experiences. Working in the Energy program alongside IIASA staff and fellow YSSPers from all over the world, Kar puzzles out the unsolved challenge of how to create change for the rural poor.
“That has been one of my drivers, I take it as an intellectual challenge,” said Kar. “Is there a systems approach to the problem?”
For now, Kar is happy if he can return at the end of the day to his family, which he brought with him to Austria during his time as a YSSP participant, feeling like he is opening the door to a vast literature on technology adoption and human behavior, yet untapped in the field of cooking energy access.
“This research is only a very small baby step into trying something different,” said Kar, “I think this sector has so many unanswered questions, if I can at least flag that there is a lot of literature out there in other domains and maybe we can use some of it, I think that would be good enough for me.”
Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
On 14 and 15 May, Vienna hosted two important events within the frame of the world energy and climate change agendas: the Vienna Energy Forum and the R20 Austrian World Summit. Since I had the pleasure and privilege to attend both, I would like to share some insights and relevant messages I took home with me.
To begin with, ‘renewable energy’ was the buzzword of the moment. Renewable energy is not only the future, it is the present. Recently, 20-year solar PV contracts were signed for US$0.02/kWh. However, renewable energy is not only about mitigating the effects of climate change, but also about turning the planet into a world we (humans from all regions, regardless of the local conditions) want to live in. It is not only about producing energy, about reaching a number of KWh equivalent to the expected demand–renewables are about providing a service to communities, meeting their needs, and improving their ways of life. It does not consist only of taking a solar LED lamp to a remote rural house in India or Africa. It is about first understanding the problem and then seeking the right solution. Such a light will be of no use if a mother has to spend the whole day walking 10 km to find water at the closest spring or well, and come back by sunset to work on her loom, only to find that the lamp has run out of battery. Why? Because her son had to take it to school to light his way back home.
This is where the concept of ‘nexus’ entered the room, and I have to say that more than once it was brought up by IIASA Deputy Director General Nebojsa Nakicenovic. A nexus approach means adopting an integrated approach and understanding both the problems and the solutions, the cross and rebound effects, and the synergies; and it is on the latter that we should focus our efforts to maximize the effect with minimal effort. Looking at the nexus involves addressing the interdependencies between the water, energy, and food sectors, but also expanding the reach to other critical dimensions such as health, poverty, education, and gender. Overall, this means pursuing the Sustainable Development Goals (SDGs).
Another key word that was repeatedly mentioned was finance. The question was how to raise and mobilize funds for the implementation of the required solutions and initiatives. The answer: blended funding and private funding mobilization. This means combining different funding sources, including crowd funding and citizen-social funding initiatives, and engaging the private sector by reducing the risk for investors. A wonderful example was presented by the city of Vienna, where a solar power plant was completely funded (and thus owned) by Viennese citizens through the purchase of shares.
This connects with the last message: the importance of a bottom-up approach and the critical role of those at the local level. Speakers and panelists gave several examples of successful initiatives in Mali, India, Vienna, and California. Most of the debates focused on how to search for solutions and facilitate access to funding and implementation in the Global South. However, two things became clear. Firstly, massive political and investment efforts are required in emerging countries to set up the infrastructural and social environment (including capacity building) to achieve the SDGs. Secondly, the effort and cost of dismantling a well-rooted technological and infrastructural system once put in place, such as fossil fuel-based power networks in the case of developed countries, are also huge. Hence, the importance of emerging economies going directly for sustainable solutions, which will pay off in the future in all possible aspects. HRH Princess Abze Djigma from Burkina Faso emphasized that this is already happening in Africa. Progress is being made at a critical rate, triggered by local initiatives that will displace the age of huge, donor-funded, top-down projects, to give way to bottom-up, collaborative co-funding and co-development.
Overall, if I had to pick just one message among the information overload I faced over these two days, it would be the statement by a young fellow in the audience from African Champions: “Africa is not underdeveloped, it is waiting and watching not to repeat the mistakes made by the rest of the world.” We should keep this message in mind.
Here, we respond to three important themes raised in these comments. The first concerns the interpretation of our findings about the significance of subsidy removal for reducing CO2 emissions, the second concerns our approach to modeling and the data we used, and the third relates to policy options for more effective subsidy reform.
What are fossil fuel subsidies and why are they interesting for climate?
Fossil fuel subsidies are government interventions which decrease the price of fossil fuels below the market price. They can go to supporting the extraction of oil, gas, and coal (production subsidies) or making fuels cheaper for consumers (consumption subsidies) and amounted to over US$400 billion in 2015. There is a certain irony in that so many governments signed on to the Paris Agreement in 2015 yet in that same year many of those same governments spent so much money making fossil fuels cheaper.
How much would removing these subsidies help climate change mitigation efforts? How does it compare to what countries have already pledged to do for the climate under the Paris Agreement?
Comparing emission reductions from subsidy removal to key climate targets
Some commenters claim that it is already known that the effect of removing fossil fuel subsidies on emissions is limited. However, according to the authoritative Intergovernmental Panel on Climate Change Fifth Assessment Report (IPCC AR5), subsidy reform “can achieve significant emission reductions”. This view also is evident in the political sphere as: the Friends of Fossil Fuel Subsidy Reform, a group of countries called fossil fuel subsidy reform “the missing piece of the puzzle in the fight against climate change”.
Our findings are that fossil fuel subsidy removal would lead to a 1-4% reduction in CO2 emissions in the energy sector by 2030 if oil prices stay low, and 1-5% if oil prices rise again, compared to the rise in emissions if subsidies are maintained, the baseline. It means that subsidy reform is a modest contribution to the global reductions required to achieve 2°C in a least-cost pathway, 27-57% by 2030.
More importantly, in our paper we compare emission reductions from subsidy removal not to this ideal goal, but to the actual targets pledged in the context of the Paris Agreement. Globally, Paris pledges would reduce emissions against the baseline in the energy sector by 9-13% in 2030 (under a moderate growth baseline) which is a larger reduction than fossil fuel subsidy removal would deliver. Under both the Paris climate pledges and fossil fuel subsidy phase-out global emissions would continue to rise whereas to achieve the 2°C target they should peak and eventually decline.
Identifying the regions with greatest impact
This global assessment is only part of our study. In addition, we show how the impacts of subsidy removal are different by region. In the major oil and gas exporting regions (Middle East and North Africa, Russia and its neighboring countries, and Latin America), removing fossil fuel subsidies lowers emissions by the same amount or more than these countries’ Paris pledges. Government revenues in these regions largely come from energy exports, which are squeezed by today’s low oil prices. Lowering government spending by removing subsidies is a real political opportunity to reduce emissions in these regions.
In other developing and emerging economies (India, China, the rest of Asia and Sub-Saharan Africa), removing fossil fuel subsidies has less of an effect on emissions than these countries’ Paris pledges. In addition, the number of people who might be affected by subsidy removal in these regions is higher, simply because there are many more people living below the poverty line, for whom subsidies make the most difference. Taken together, these two findings frame one of our main results: that subsidy removal would be most useful for the climate precisely in the regions where it would affect fewer people living below the poverty line.
Data on subsidies
The second theme we would like to address relates to our data and modeling. Some commenters claimed that we underestimate both production subsidies and the effect of their removal.
According to data from the IEA and OECD only about 4% of subsidies are production subsidies. The International Institute for Sustainable Development (IISD) and Overseas Development Institute (ODI) publish an independent estimate based on their own definition and approach. Extrapolating to the global level, production subsidies would be about 14% in 2013 under their approach. We ran a sensitivity analysis using this higher production subsidies estimate. This did not change our findings (discussed in the Supplementary Information to our article).
There are other, fragmented estimates for electricity generation subsidies in individual countries, which generally take a different view of subsidies. For example, the recent report from IISD on Chinese subsidies to coal-fired power plants indicates that in 2014 and 2015, between 89% and 97% of these subsidies went to incentivize air pollution control equipment or closing inefficient plants. According to the same report, these subsidies also dropped by half from 2014 to 2015. Few governments would consider this as an environmentally-harmful subsidy, and removing such support will increase, not decrease emissions.
For our main analysis, we relied on IEA and OECD data for both production and consumption subsidies because these inventories are aligned with governments’ own estimates which are prepared as part of the G20 pledge to remove subsidies from 2009 reaffirmed in 2016. By using the same input data as governments and international organizations who are pledging or considering fossil fuel subsidy removal, we ensure the policy relevance of our results for these actors.
Estimating the effects of production subsidy removal
There were several comparisons of our results with those reported in a recent paper by Erickson et.al. in Nature Energy, which found that under the currently low oil prices, removing production subsidies in the US would make several oil fields unprofitable and eventually result in their closure. We find contrasting these two papers misleading as they ask very different research questions. Our study does not investigate how many oil fields in the US or elsewhere will become unprofitable after subsidy removal, but looks at the global effect of subsidy removal on emissions by taking into account trade in fossil fuels, the demand response and potential substitution of fuels and technologies. Erickson and his colleagues do not ask how much emissions will change as a result of closed oil fields. These are two very different questions.
Erickson and his colleagues compare the amount of carbon embedded in the oil reserves that may become unprofitable due to subsidy removal, to how much carbon the US would be allowed to emit under a stringent climate target. This creates an impression that they investigate the impact of removing oil production subsidies on US emissions. However, calculating the emission impact from removing oil production subsidies requires not only calculating the emissions embedded in foregone oil production, but also the possible emissions resulting from replacing this lost oil with other fuels, or changes in demand, for example if Americans choose to drive less if wells are closed, or if the US imports oil instead. We use these types of feedbacks in our models to calculate the emissions effects of subsidy removal (both consumption and production).
Redirecting subsidy funds
The third theme raised in the comments to our article was why we did not model redirecting subsidies to supporting renewable energy. While this is a very tempting question to ask from a climate perspective, and certainly one which we could do in our models, we did not consider it a realistic policy to be prioritized in our scenarios. In most countries fuel subsidies were introduced to support those on low incomes, although it is an inefficient way to do so. A state budget deficit and today’s low oil prices can often prompt successful subsidy reform. Indonesia for example recently expanded spending on infrastructure and programs to reduce poverty, while India introduced vouchers for cooking fuels. Iran, meanwhile introduced universal health coverage.
We do however hope that our transparent and rigorous assessment of the effects of subsidy removal on CO2 emissions and energy use will support realistic and effective subsidy removal policies, and help in understanding the relative importance of a range of emission-reduction measures needed for achieving the ambitious long-term targets of the Paris Agreement.
As some commenters pointed out, we need all tools in the box to combat the enormous challenge of climate change. We fully agree. At the same time, we also believe in the need to understand how much each tool can do and where it can be most effective. This is exactly what our study answers.
Jewell J, McCollum, D Emmerling J, Bertram C, Gernaat DEHJ, Krey V, Paroussos L, Berger L, Fragkiadakis K, Keppo I, Saadi, N, Tavoni M, van Vuuren D, Vinichenko V, Riahi K (2018) Limited emission reductions from fuel subsidy removal except in energy exporting regions. Nature DOI: 10.1038/nature25467
Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.