The clean energy imperative

Published September 26, 2016
Upfront tariffs have been introduced for solar and small hydro producers.—White Star
Upfront tariffs have been introduced for solar and small hydro producers.—White Star

- Pakistan’s first solar power plant was funded by Beijing in 2015

- Power sector deficits average 4,000 megawatts

- For affordable clean energy, Pakistan requires more transmission lines, cost-effective production, better-regulated renewable energy markets

IN 2015, a UNDP assessment described Pakistan as “one of the most vulnerable countries in the world to climate change”. The study expressed particular concern about climate change threats to the country’s food, water, and energy security. Germanwatch’s latest Global Climate Risk Index, which measures how nations are affected by weather-related disasters, ranks Pakistan as the world’s 8th most impacted nation. Experts have estimated that about a quarter of the country’s land area and half its population is vulnerable to climate change-related disasters. With its dry climate, extreme weather events, and natural resource shortages, the country’s climate vulnerabilities can’t be overstated.

Although Pakistan’s serious climate change risks amplify the need for a tighter embrace of clean energy, it is an admittedly tall order, given that Islamabad is not exactly a robust champion of clean energy. Renewables are mentioned only briefly in the National Energy Policy of 2013 — the only comprehensive energy policy. More broadly, the climate change ministry received a paltry 0.016pc of the funds awarded by the Public Sector Development Program to 40 federal ministries and divisions in the 2015-16 annual budgetary allowance. Unsurprisingly, the document submitted by Pakistan to last year’s Paris climate conference outlining national climate change goals was reportedly submitted in November 2015 — after the deadline and laced with errors.

Additionally, the constraints to clean energy development are well-known. However, more immediate challenges push clean energy to the policy back-burner. Subpar infrastructure makes clean energy technology and storage costs prohibitively high for producers, while poorly regulated markets drive up costs for consumers. The 18th Amendment abolished the federal environment ministry, putting the onus on provincial governments to manage climate-related portfolios with which they have little experience. And yet, there is genuine potential for, and very real progress toward, a clean energy future. Pakistan has a national climate change policy and an implementing framework. The latter features climate adaptation measures targeting energy, and includes explicit timeframes for their completion. Remarkably, last year the Lahore High Court, in a ruling with few precedents anywhere in the world, ordered the government to do more to enforce these adaptation measures. The ruling established a new climate change commission to oversee the process.

The government is also providing new incentives to embrace renewables. Last year, generous upfront tariffs were announced for solar and small hydro producers. Tax exemptions have been offered for solar imports and solar-and wind-energy producing industries. Officials have approved new measures that enable solar-power-using homeowners to receive credits on future energy bills if they let their excess power be supplied to the national grid. Small farmers have been offered interest-free loans to use solar tube wells. And in Khyber Pakhtunkhwa, the PTI government has promised not only to provide solar power to thousands of off-grid households, but also to pay 90pc of the bill. In developing countries like Pakistan, clean energy is a solution — if it’s affordable. Based on these encouraging initiatives, it is clear that officialdom has received the memo.

Meanwhile, the country has enjoyed some clean energy success stories. Its first solar power plant, funded by Beijing, was launched in 2015. More achievements could soon be on the way. Last year, Pakistan concluded deals with Danish and French companies to develop wind energy projects. Additionally, Pakistan and the US have jointly established a clean energy partnership to help attract investment for renewable energy projects.

However, clean energy projects need not be limited to large, donor-funded schemes. While advantageous, these take time to bring on line and can be costly for the government, which must absorb high capital and start-up costs to attract investors to a volatile country where renewable energy is far from an established portfolio. Indeed, there’s something to be said for the utility of homegrown, micro-level projects — from small-scale wind power initiatives to the provision of solar lanterns to remote villages. To be sure, they don’t deliver the political benefits of a glistening new coal power plant, or other high-visibility, large-scale schemes geared to respond to baseline demand. Yet they can deliver, even if on a relatively small scale, a major national benefit: energy security. This is no small matter in a nation that suffers from power sector deficits that average 4,000 megawatts.

To make clean energy truly affordable, Pakistan will need to go even further. More transmission lines and other infrastructure are essential, as are better-regulated renewable energy markets. Above all, Islamabad must craft financing models that ensure the most cost-efficient production of as much energy as possible. All this will take time. Let’s be clear: renewables won’t be dominating Pakistan’s energy mix anytime soon. Still, they’re poised to be better represented within it in the not too distant future.

Given the stakes involved, that’s welcome news. Blunting the effects of climate change by scaling up clean energy use would reduce the likelihood of climate-induced nightmare scenarios — which include the destruction of agriculture and ecosystems, widespread water scarcity, and waves of climate refugees. Ominously, the livelihood losses and mass displacements associated with the most serious consequences of climate change could increase prospects for radicalisation within the country’s large, youthful population. The time has never been riper for the government to make a deep and sustained commitment to clean and affordable energy.

The writer is a senior associate for South-Asia with the Woodrow Wilson International Centre for Scholars in Washington, DC. He tweets @michaelkugelman

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