STRENGTHENING PLEDGES IN 2020

In December 2015, virtually all Parties to the United Nations Framework Convention on Climate Change (UNFCCC) agreed to limit the rise in the global average temperature to well below 2 degrees Celsius (°C), and ideally 1.5°C, by the end of the present century, compared to pre-industrial levels. With 187 Parties having ratified the Paris Agreement to date, the global consensus on addressing the threat is clear. By the end of November 2019, government pledges to reduce greenhouse gas (GHG) emissions, including NDCs under the Paris Agreement, still fell short of the global goals adopted in 2015 and would only serve to limit global warming to about 2.6°C (Climate Action Tracker, 2019). This is an alarming shortfall compared to the levels of permissible climate change agreed. Current NDC
commitments miss the 2°C objective by 30% and the 1.5°C effort by over 70% (Climate Action Tracker, 2019). Recognising the need for urgent action, several governments and private sector actors made commitments at the United Nations (UN) Climate Action Summit to further reduce GHG emissions and deliver concrete actions towards the objectives of the Paris Agreement. Specifically, 70 countries announced their intention to raise the ambitions of their national action plans by 2020, while 65 national and sub-national governments pledged to achieve net zero emissions by 2050 (UNCAS, 2019). The year 2020 will be decisive for policy makers, in that they will need to define their responses to the climate emergency for the next decade. Meeting the agreed levels of ambition at this next NDC milestone is crucial to avoid catastrophic climate change and its related, severely negative socioeconomic impacts. Recognising the fundamental contribution of renewables to achieving global climate objectives, this analysis quantifies renewable power sector targets included in current NDCs and assesses opportunities for strengthening such pledges in 2020.

This translates into a 33% reduction in cumulative energy sector emissions during 2015-2050 compared to the current trajectory (see Figure 1 for a disaggregation of emission reductions in 2050 and the evolution of emissions during the transition). The power sector (including combined heat and power), would need to reduce its emissions in 2050 by 78% more than under current strategies and plans, contributing to a 14% reduction in cumulative energy sector emissions over the 2015-2050 period (IRENA, 2019b).

ASSESSING RENEWABLE POWER TARGETS IN CURRENT NDC

Most countries have recognised the role of renewables in mitigating emissions that originate from
electricity generation and have included them in their first round of NDCs. To date3, 184 Parties to the
UNFCCC have formally submitted 156 NDCs.4 Of these, 90% (or 140 NDCs) refer to renewable energy action for the power sector, while 67% (or 105 NDCs) include quantified targets for renewable electricity generation (see Figure 2). Almost all NDCs from North Africa and the Middle East (100%), Sub Saharan Africa (98%) and Asia (93%) specifically mention renewable electricity measures, while the proportion of NDCs referring to renewables is lower in Europe (53%) and North America and Oceania (84%).

PUTTING POWER SECTOR NDC TARGETS INTO CONTEXT Figure 5 shows the projected deployment through 2030 in the three different scenarios. While NDCs would result in 3.2 TW of global renewable installed capacity at the end of 2030, current and planned policies are expected to deliver 5.2 TW. A higher deployment level, amounting to 7.7 TW, could be achieved in 2030 in a cost-effective way and with considerable socio-economic benefits globally (IRENA, 2019b). Noteworthy in this analysis is the fact that the pace of renewable energy deployment foreseen by current NDCs is slower than actual deployment trends. Figure 5 shows how actual growth in renewable power installed capacity during 2015–2018 has already well exceeded NDC implementation projections.

MOVING BEYOND THE POWER SECTOR TO RAISE NDC AMBITIONS

Aligning investment with Paris Agreement objectives Advancing the global energy transformation to
address climate challenge would require a massive scaling-up and re-directing of investments in the energy sector. A cumulative USD 110 trillion would be needed under an energy transformation
scenario (IRENA, 2019b). Of this, only 20% (or USD 22.6 trillion) would be for new renewable generation capacity – illustrating the fact that power is only one aspect of the solution. Over USD 37 trillion would need to be invested in energy efficiency, USD 13 trillion in electrification (including for electric vehicles and railways) and USD 12 trillion in power grid and energy flexibility measures (e.g., smart meters and energy storage) (see Figure 12).

In closing the financing gap, the private sector will continue to provide the bulk of renewable energy investment, but public capital and support remain important to kick-start new markets and mobilise
new capital sources. The private sector currently finances around 90% of annual direct investment in renewable energy assets, on average (IRENA and CPI, 2018). This includes non-energy producing
companies, which have started sourcing electricity and heat from renewables.

Establishing the policy framework for a just transition To achieve the objectives of the Paris Agreement, drastic emission reductions are required. This calls for a global energy transformation that
encompasses the entire energy system (i.e., beyond just renewables and the power sector) as part of the wider economy and the planet’s natural systems (see Figure 13). This transformation of the energy system, therefore, cannot be viewed in isolation from broader socio-economic structures. Developments in the energy sector would have impacts throughout the economy and would prompt changes in the socio-economic footprint, including in terms of gross domestic product (GDP), employment and human welfare (IRENA, 2019b) (see Figure 14).

However, different impacts (positive and negative) can be expected in different countries and regions, due to the diversity of socio-economic structures and their interactions with the energy transformation. To address these misalignments and ensure a just transition, an integrated policy framework is needed that extends well beyond the energy sector itself and pays greater attention to the transformative impacts on society, institutions, financing, ownership structures and the wider economy. As depicted in Figure 15, the policy framework encompasses three sets of transformative policies. In addition to deployment policies specifically aimed at accelerating the uptake of renewables (push policies such as targets and mandates; pull policies such as administratively and competitively set tariffs; and fiscal and financial incentives), enabling and integrating policies are also needed. Enabling policies aim to strengthen co-ordination between the energy sector and the rest of the economy and focus, for example, on making the energy sector a leading sector of the economy (industrial policies including R&D); building the necessary skills and capabilities for renewables production, use and application (education and training policies); facilitating labour mobility and job security (labour market and social protection policies); and developing adequate public investment strategies (financial policies). Integrating policies aim to promote the integration of renewables with countries’ economic ambitions and social objectives; these include infrastructure policies and policies for sector coupling and storage (IRENA, 2019a).

CONCLUSIONS Although renewables are widely recognised as a key tool in addressing climate change, NDC pledges are not ambitious enough to meet the goals set out in the Paris Agreement. Current NDC power argets leave 59% of the potential for renewable electricity in line with the climate agreement untapped by 2030, according to IRENA estimates. NDC power targets even fall short of countries’ existing strategies and plans. Moreover, NDCs do not reflect the actual, rapid growth of renewable power over the past decade. Higher renewable electricity deployment, amounting to 7.7 TW (or 3.3 times current global capacity), could be achieved cost-effectively and would bring considerable socio-economic benefits, according to IRENA’s global energy transformation scenario. Meanwhile, aligning NDCs more closely to existing national and sub-national plans could accelerate deployment and increase the world’s renewable power capacity to 5.2 TW in 2030 (2.2 times current global capacity). Considering the current growth in renewable power capacity (8.6% annually since 2015), NDCs fall short of market realities. Implementing existing NDCs for 2030 would only translate into annual capacity growth of 4% for 2015–2030, despite actual annual renewable power growth already amounting to 5.9% in 2010–2014. In fact, given current deployment trends, the 3.2 TW power capacity targeted by current NDCs for 2030 will already be realised by 2022.

Source:IRENA