Focus on clean energy funds

Focus on clean energy funds

Increasing zero carbon energy services pits climate change mitigation against increasing access to modern energy services for the poor.

According to the clarion call issued by gofossilfree.org campaign (a project of 350.org), “Divestment is the opposite of an investment – it simply means getting rid of stocks, bonds or investment funds that are unethical or morally ambiguous.”

The campaign points out that $3.4 trillion is the approximate value of the 518 institutions that have divested to date including: faith-based groups: 26%; foundations – 24%; governmental organisations- 14%; pension funds – 13%; colleges, universities and schools – 12%; NGOs-6%; for profit corporations – 3% and health – 1%.

Faith-based groups are at the forefront of divestment but the percentage differential between faith-based groups and NGOs and for-profit corporations really stand out. Interestingly, the latter two groups are supposed to be key actors on clean energy and climate change.

It is also striking that currently no organisation from the largest aggregate greenhouse gas (GHG) emitting developing countries – China, India and Brazil – are listed. In the case of South Africa, the “Desmond and Leah Tutu Legacy Foundation” is the only organisation listed. Is fossil fuel divestment not relevant to developing countries? Or, is it that fossil free divestment needs to proactively include new investing opportunities for clean energy for the poor in developing countries?

The fossil fuel divestment campaign draws inspiration from the global divestment against South Africa’s apartheid regime. The anti-apartheid divestment campaign worked because an amalgam of stakeholders coalesced around divesting from a racially unjust and oppressive regime in order to promote the goals of racial equality and democracy. But the scaling up of fossil fuel divestment into a fully inclusive global campaign involving the key GHG aggregate emitters confronted with serious poverty eradication and gender related sustainable energy concerns has proven to be much more challenging.

The national efforts to divest from fossil fuels energy sources and mitigate associated GHGs have tended to be viewed as politically contentious double-headed Janus coins. On one side, fossil fuel based energy security needs including the need for cost-effective and reliable energy consumption and production are seen as the primary drivers of national socioeconomic development. On the other side, fossil fuel driven energy consumption and production patterns directly contribute to anthropogenic GHG emissions that cause climate change.

Countries have varying responsibilities for historical and aggregate GHG emissions, and varied capacities for climate change mitigation and adaption. The wide variations in terms of GHG emissions as well as the differences in national responsive capacities combined with different national energy development goals mean that fossil fuel divestment scenarios and approaches need to be equally flexible and diverse.

But, there is a more neglected aspect of the energy-climate change debate which fossil fuel divestment needs to take stock of. Poor households rely heavily on solid fuels (wood, coal, dung etc) which results in toxic levels of household air pollution and emissions of short lived climate pollutants (SLCPs).

In 2014, the World Health Organisation (WHO) estimated that household air pollution caused by particulate matter emissions from the inefficient combustion of solid fuels was linked to 4.3 million deaths. Measuring 2.5 micrometres or less, particulate matter (PM 2.5) has been directly linked with causing heart disease, chronic obstructive pulmonary disease, and lung cancer.

Sustainable development
As demonstrated by a 2011 United Nations Environment Programme and World Meteorological Organisation Report, one of the principal components of PM 2.5 – black carbon – is known to be a short-term climate pollutant. Reducing PM 2.5 offers double benefits, so why is there no globally agreed protocol for action?

The Synthesis Report of the Intergovernmental Panel on Climate Change has stated that: “Mitigation and adaptation raise issues of equity, justice and fairness and are necessary to achieve sustainable development and poverty eradication. Many of those most vulnerable to climate change have contributed and contribute little to GHG emissions.” This inequity is worth underscoring because it raises question: What does fossil fuel divestment mean for those who are energy poor and climate vulnerable?

Fossil free divestment in the absence of investment options for increasing low-carbon and zero carbon energy services for the poor appears to pit climate change mitigation against increasing access to modern energy services for the poor. According to the WHO, close to three billion people - "the forgotten three billion"-depend on highly inefficient and polluting energy sources which impact negatively on their daily lives. So where is the global urgency towards improving the lives of poor women and children who spend a disproportionate amount of time in front of polluted hearths?

In 2010, the Global Alliance for Clean Cook Stoves set an ambitious goal of “100 by 20” – that is 100 million homes with clean and efficient stoves and fuels by 2020.  But how has this goal progressed in Sub-Saharan Africa and South Asia where the majority of the “energy poor” reside?

To make matters worse, Southern Africa is now in the grip of a severe El Niño-induced drought. Swaziland, Zimbabwe, Lesotho, Malawi and Mozambique have all declared national drought disasters and called for urgent international assistance.  Massive energy and food insecurity along with water scarcity bodes grave danger for this region.

The 2015 Paris Agreement on Climate Change does not offer an exact mechanism that can jointly reduce SLCPs and increase access to clean energy for the poor. Two of the most promising initiatives related to the “business” of clean energy access are not found in the actual Paris Agreement, but were launched in the margins of the 2015 Paris Conference. These new public-private initiatives on clean energy access for the poor are promising: Breakthrough Energy Coalition (BEC) and, International Solar Alliance.

Fossil fuel divestment needs to transform into concrete sustainable energy solutions for the poor. ".... Three billion"- the majority of whom live in South Asia and Sub-Saharan Africa - to bear the heavy burdens that accrue from energy poverty and climate vulnerability."

(Cherian is the author of Energy and Global Climate Change: Bridging the Sustainable Development Divide)
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