By Sultan Ahmed Al Jaber, Special to CNN
Editor’s note: Sultan Ahmed Al Jaber is United Arab Emirates special envoy for energy and climate change and CEO of Masdar, an Abu Dhabi-based renewable energy initiative. The views expressed are his own.
Four months ago today, U.S. President Barack Obama declared a state of emergency for five states and the District of Columbia over the approach of Hurricane Sandy. The super storm was a reminder that climate change is blind to faith, socio-economic status and geography. It also underscored that supplying cheap, sustainable energy and mitigating climate change is not a challenge for future generations – it is our challenge today.
And energy-rich nations have a shared responsibility to do more. After all, they have the financial and technical ability, as well as decades of expertise, to create the necessary growth of a new energy industry balanced by renewable sources of power.
But beyond having the resources and expertise, energy-rich nations also have an essential element for any sustainable solution: taking action now is in their own interests. In fact, it is an economic and environmental opportunity that it would be almost foolhardy to miss. Oil and gas are finite. Renewable energy is forever. To extend their energy leadership into the future, countries rich in hydrocarbons should seize this opportunity to invest profits into long-term economic growth.
Recent investments are demonstrating that energy-rich countries have recognized the potential payoff.
For example, investments by the United Arab Emirates – home to the seventh largest proven oil reserves – account for 12 percent of the world’s installed concentrated solar power capacity. The United States, a nation predicted to become the world’s largest oil producer, invested $51 billion in renewables in 2011. And Saudi Arabia, a country synonymous with oil production, pledged to invest $109 billion to develop 41GW of solar capacity by 2032.
In 2012, despite the global economic downturn, $268 billion was still invested worldwide in renewable energy. Today, renewables remain the fastest growing sector in the energy industry.
These investments are paying off. The price of solar panels has fallen by two-thirds in the last two years, due to the incredible scale-up of production capacity in China. And the price of onshore wind turbines has dropped by 10 percent. Together, renewable power (excluding large hydropower) accounted for 44 percent of new generation capacity added worldwide in 2011.
Yet despite these impressive strides, we need to deploy more renewable power to keep pace with rising energy demands caused by soaring growth in developing economies.
Moving the cost of clean energy to parity with conventional power will require a mix of diverse policy mechanisms, direct government investment and innovative platforms for knowledge-sharing. Energy-rich countries have the resources and expertise to drive the necessary change across these dimensions.
No universal policy will spur energy efficiency and renewable energy development. From the feed-in tariffs that have jump-started renewable energy deployment in Europe, to the state-level renewable portfolio standards that have supported growth in the United States, location specific policies have proven that different approaches can have similar results.
Local governments, states, provinces and countries must continue to be the test-beds for forward thinking policy that result in industry growth and investment. But policy experimentation alone is not enough. Governments, particularly in energy-rich nations, must find ways to multiply the impact of their leadership, by sharing effective policy, learning new policy and reaping the benefits of that experimentation.
While healthy competition has been at the core of innovation for centuries, innovating for the common good requires a new mindset. Safeguarding proprietary knowledge – fundamental to commercial competition – can hinder human development when it comes to advancing common needs like education, human health, poverty reduction, or in this case, global climate change.
In a world of widely distributed knowledge, commercial interests can also gain from a more collaborative model. Companies can no longer afford to rely solely on their own research to innovate complete solutions to complex problems. Instead, they should be able to buy or license information from other companies and implement it accordingly. Using this model, companies can specialize and share risk, as well as reap the rewards.
The estimated $50 billion price tag from Sandy is simply the start. Widespread droughts are driving up food prices around the globe. Powerful tropical storms combined with sea-level rise are doing more economic damage and costing more to recover from than ever before. In short, the economic risk of climate change – the high cost of inaction in the future – far outweighs the cost of action today.
Renewable and clean energy solutions must be essential components of the global energy mix moving forward. Energy-rich nations are in the best position to collectively carry that torch.
The time to do more is now.