Serbia is expanding green investments, seeking to spur a post-COVID recovery and build resilience against future shocks, especially for its most vulnerable citizens. To help Serbia advance its strategic goals to decarbonize the economy and include more citizens in the energy transition, the World Bank Board of Directors approved today a $50 million equivalent loan for the Scaling Up Residential Clean Energy (SURCE) Project.
The project is designed to lead to energy savings, increased comfort, and warmer homes for residents through investments in clean and efficient heating solutions and rooftop solar photovoltaic systems, in a shift away from air-polluting fossil fuels that dominate Serbia’s energy mix.
“The residential sector in Serbia has a large untapped potential for energy efficiency improvements: households account for about one-third of Serbia’s final energy consumption, with about three-quarters of the energy they consume used for heating purposes,” said Nicola Pontara, World Bank Country Manager for Serbia. “Investments required to improve energy efficiency, especially in single-family houses, where most lower-income citizens live, will lead to sizeable social, economic, and environmental benefits.”
Sustainable heating investments are expected to reach 25,000 households during the five years of the project. Some 2,500 households will receive social inclusion “top-up grants”, supporting the most vulnerable citizens, and 3,000 households are expected to shift away from traditional solid fuel heating solutions. Rooftop solar photovoltaic installations are expected to add 4MW in installed renewable energy capacity.
The project will prioritize investments in single-family houses, which tend to have poor thermal characteristics and rely on more polluting and less efficient coal and wood boilers for heating, especially in rural areas. In urban areas, among households without central or district heating access, 60 percent use firewood for heating and another 15 percent coal.
Residential heating is a major source of air pollution in Serbian cities, especially in winter months, when it accounts for more than half of fine particulate matter (PM2.5) emissions, as the largest share of the heating needs are met by firewood and coal. A recent World Bank study on Western Balkan countries showed that energy savings above 50 percent can be achieved in single-family houses by retrofitting insulation of walls, roof and windows.
Olaf Scholz Calls for Accelerated Energy Transition
In a special address delivered on the closing day of the World Economic Forum Annual Meeting, German Chancellor Olaf Scholz delivered a scathing indictment of the Russian war against Ukraine and called for an accelerated drive towards a clean energy future.
“A major nuclear power is behaving as if it had the right to redraw borders,” Scholz said. “Putin wants a return to a world order in which strength dictates what is right; in which freedom, sovereignty and self-determination are simply not for everyone. That is imperialism. That is an attempt to blast us back to a time when war was a common instrument of politics, when our continent and the world were without a stable peaceful order.”
Scholz noted that Russia’s invasion has produced an unprecedented closing of ranks among Western nations. “Putin underestimated the unity and vigour with which the G7, NATO and the EU would respond to his aggression,” he said. “Working together, we have imposed sanctions that are tougher and further-reaching than any previously imposed on a country of Russia’s size.”
The chancellor urged leaders to accelerate the energy transition. “Now we have even more cause to move away from fossil fuels than before,” he said. “Ultimately, our goal of achieving carbon neutrality by 2045 has been given an additional boost by Putin’s war.”
He pointed to German plans to phase out imports of Russian oil by the end of 2022, adding: “We are also working flat out to end our reliance on Russian gas.” Germany plans to nearly triple its rate of emissions reductions by 2030 and increase renewables’ contribution to the country’s energy mix to 80%, by the end of this decade.
On China, Scholz said: “China is a global player – once again, we should add, because historically speaking, that was consistently the case throughout long periods of world history.” He went on: “But just as that does not mean we need to isolate China, neither does it give rise to the claim of Chinese hegemony in Asia and beyond. Particularly since we are seeing new and ambitious powers emerging in Asia, Africa and Latin America.”
Scholz also emphasized the need for the developed nations of the Global North to expand ties to the democracies of the Global South. “For too long we have practically equated ‘democracy’ with ‘the West’ in the classical sense,” he said. “Yet it was actually this Western world that denied the South its rights and its freedom in a most undemocratic manner until well into the last century. I am speaking of colonialism.”
While recognizing the need to diversify supply chains and end dependence on Russian oil and gas, Scholz listed the many benefits that globalization yielded over the past several decades. “Deglobalization is not the right way to go,” he said. “It will not work. Contrary to everything that populists grandly proclaim, it is the enterprises, employees and consumers in our countries who pay the price of customs duties and trade barriers. Those people are already bearing the brunt of soaring prices.”
Scholz called for “a sustainable, resilient globalization that uses natural resources sparingly and, above all, takes the needs of future generations into account”.
Southeast Asian nations need to accelerate their clean energy transitions
Southeast Asia’s reliance on fossil fuels to meet rising demand for energy is proving to be a significant vulnerability in today’s energy crisis. Meeting energy security and emissions goals will require countries in the region to make major efforts to improve energy efficiency, accelerate renewable power generation and switch to low emissions fuels, according to the International Energy Agency.
The 10 member economies of the Association of Southeast Asian Nations (ASEAN) are among the world’s fastest growing. Their accelerated transition to sustainable energy would not only cut carbon dioxide (CO2) emissions and fossil fuel imports, according to the IEA’s Southeast Asia Energy Outlook 2022, but also speed up universal access to electricity and clean cooking for their citizens, as well as provide greater business opportunities in the emerging clean energy economy.
Based on today’s policy settings, energy demand in the region is set to grow by around 3% a year to 2030, with three-quarters of that increased demand being met by fossil fuels, according to the new report, the IEA’s fifth edition of the regional outlook. As a result, Southeast Asia’s CO2 emissions would grow 35% from 2020 levels. And without stronger policy action, its net oil import bill, which stood at USD 50 billion in 2020, is set to multiply in size rapidly if today’s high commodity prices endure.
“Southeast Asia is an emerging heavyweight of global energy, and the speed of its economic development makes it even more essential that the region’s governments hasten efforts to transition to sustainable energy and that they get the international support they need to do so,” said IEA Executive Director Fatih Birol. “This report is a testament to the IEA’s strong and productive relationship with ASEAN’s dynamic members, and we stand ready to accompany them as they strive to provide clean, affordable and secure energy for all their citizens.”
ASEAN’s members are Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam. Several of them have announced ambitious targets for reaching carbon neutrality and curbing reliance on coal-fired power. The report notes that international support will be critical, especially to boost innovation and develop much needed infrastructure such as renewable power generation and grids, as well as facilities for low emissions fuels.
Total energy investment would need to reach USD 190 billion a year by 2030 to meet the region’s climate goals, up from around USD 70 billion a year between 2016 and 2020. While international development finance is essential, the report says ASEAN members could reduce financing costs and attract private investors by signalling their clear commitment to deploy low-carbon energy and by improving regulatory and financing frameworks.
Southeast Asia is set to play a major role in global energy transitions as a key supplier of critical minerals and manufacturer of clean energy products. Indonesia and the Philippines are the two largest nickel producers in the world; Indonesia and Myanmar are the second and third largest tin producers; Myanmar accounts for 13% of global rare earth production; and Southeast Asia provides 6% of the world’s bauxite. Meanwhile, Malaysia and Viet Nam are the world’s second and third largest manufacturers of solar PV modules, while Thailand is the 11th largest car manufacturer in the world and could become a key manufacturing hub for electric vehicles.
Investment in mineral exploration has declined in recent years, and the region’s share of the global mineral exploration budget has halved since 2012. This trend needs to reverse if Southeast Asia is to realise its potential in this growing sector.
Q&A: ‘People have to be at the centre of the energy transformation’
In June 2021, the EU’s Group of chief Scientific Advisors (GCSA) published the Scientific Opinion entitled “A systemic approach to the energy transition in Europe”, arguing that the clean energy transition in the European Green Deal must keep people at its centre. In light of tomorrow’s RePowerEU announcement that is critical to the future of energy supply in Europe, we invite GCSA Vice-Chair Nebojsa Nakicenovic to comment on the centrality of a just transition and the importance on staying focused on a clean energy future even at times of intensifying pressure.
Tell us why the European Commission even needs a scientific opinion at all. Does not the evidence speak for itself?
This publication (A Systemic Approach to energy Transition in Europe) is part of the Science Advice Mechanism (SAM) of the European Commission. From my perspective, this is a very unique way of providing scientific advice to the decision makers. Many governments have chief scientific advisors with that function. What is unique about SAM in the European Commission is that it has three independent parts.
First, there is the Group of Chief Scientific Advisors who provide the scientific opinion. There are very clear process rules about how that happens. The other independent part is the so-called SAPEA (Scientific Advice for Policy of the European Academies). This is a consortium of over 100 European academies. They provide a scientific evidence review, similar to the climate change assessment of the IPCC (Intergovernmental Panel on Climate Change).
The assessment is a scientific analysis of what we know about a particular topic. They (SAPEA) do not provide a scientific opinion or scientific advice, importantly they look into the possible options. We, the group of seven chief scientific advisors, based on this evidence review — evidence, so factual scientific knowledge — provide a scientific opinion to the European Commission.
There is also a unit in the Commission that catalyses this process. The three groups work closely together but we are independent. That explains the context. Why would we provide a scientific opinion? It is because the topic is considered really crucial and central to multiple crisis facing Europe and the world.
Does a just transition require a transformation of the economic model of energy services? People own the problem, should they not own the solution too?
That is precisely what we have tried to address in our scientific opinion – based on the scientific evidence. We didn’t go beyond the scientific evidence.
Energy cannot be seen as a silo. We – people – have to be at the centre. That means it has to be an inclusive process involving everybody and, importantly, not leaving anyone behind. Because there is a great danger that any transformation, unfortunately, leads to winners and hopefully there will be many, many winners but also – I wouldn’t say “losers” – but there are people who fall through the cracks who might be left behind and do not have an escape hatch. This is what was a high priority – to identify how to do that.
In our scientific opinion – and in fact we say explicitly, it is essential that sustainable energy, lifestyles, and behaviours become the preferred choice for the people – become a natural choice. For that, we have to create an environment that allows that. This is clearly very, very complex, I don’t think anybody has a silver bullet on that question.
The world has changed since the paper was published in June 2021. In particular war, inflation and recent dire warnings from the IPCC about rising temperatures. How does that affect your opinion on a just transition?
I have to be very careful to distinguish what is in our scientific opinion based on the evidence and what is my personal view. It’s important not to mix the two or I would not be reflecting the scientific advice mechanism which I think is very unique – I just want to make that clear. Here is my private opinion based on our scientific opinion but not in it.
Geo-politics are changing. There is no doubt that we are in a crucial moment in history. And this is why we argued before – again, my view – that we shouldn’t lose sight of the long term objectives .
We are likely to exceed 1.5 degrees – it is almost certain that by 2040 we will be above (the limit prescribed), perhaps even earlier. From the scientific point of view, this is not new.
From the policy point of view and behavioural point of view, this is something one needs to somehow internalise. We will exceed that goal and we will bear the dangerous consequences. But, we should not lose the perspective of doing our utmost to reach 1.5 degrees in the future – and for that we need to act now.
This is another dimension of justice – intergenerational justice. We have to make sure that we leave the planet to the future generations (hopefully) in better condition than what will occur over the next decade or two.
Is it even possible for the EGD to achieve ‘a clean, circular economy, a modern, resource-efficient and competitive economy’ by 2050?
Again, we are in the realm of opinion. Nobody can tell what the future will be like.
I was very enthusiastic when in 2015 all of the world adopted the UN’s Sustainable Development Goals (SDGs) and when there was the Paris Agreement on climate change. I think those were the two really important visionary steps towards this aspirational transformation that we were talking about.
I would also argue that the European Green Deal, Fit for 55 and New European Bauhaus initiatives are even more actionable in some sense. They provide a clearer agenda for how the world and life might and should look in 2050.
I don’t want to sound too pessimistic and again let me add, this is my personal perspective – you know, 30 years is a long enough time to achieve this transformation.
We have done that before. The most recent example is of mobile phones. It all started in 1990 and today, everybody in the world has a phone. Even the poorest people have a phone because it has enabled new economic activities, because it’s beneficial for many (despite the nuisance of always being reachable!)
Another example just to show in principle this is doable, is the replacement of horses by motor vehicles. That also took 30 years in most of the countries. We have 30 years to replace our vehicle fleet by hydrogen and electric. We have just enough time for the transformation if we act immediately.
The research in this article was funded by the EU. This article was originally published in Horizon, the EU Research and Innovation Magazine.
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