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Energy Transition Pathways for the 2030 Agenda in Asia and the Pacific

Regional Trends Report on Energy for Sustainable Development 2018

image of Energy Transition Pathways for the 2030 Agenda in Asia and the Pacific

The Asia and the Pacific region has become a global economic powerhouse. The region’s rapid and sustained economic growth, increasing population, expanding industrialisation and rapid urbanization are driving rapid growth in energy demand, which. Ensuring that supplies of energy are adequate to meet the growth in demand in ways that are socially, economically and environmentally responsible creates a new set of challenges for policymakers. The transition to 2030 energy pathway, which is aimed at addressing those challenges, has four coherent and interlinked objectives – increased energy supply to meet the growing demand, improved energy security, meeting the SDG7 targets and achieving NDCs. Addressing the complex and challenging task requires policymakers to develop a clear, sustainable and achievable pathway that would enable the countries, as well as the region as a whole, to achieve the 2030 goals and targets This report undertakes an in-depth analysis to first determine the level of achievement is possible under the current policy regime by developing a baseline. It then identifies the gap between the baseline and the 2030 targets to inform policymakers the additional efforts and resources that would be needed to adequately achieve SDG7 targets as well as the NDCs mitigation targets for the energy sector. Finally, different transition pathways have been developed and their socio-economic and environmental facets have been examined to assist policymakers to make an informed decision. The report also identifies the enabling policy, technology and market environment that would accelerate the achievement of the 2030 targets.

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Policy options for the energy transition

The energy transition will require a major transformation of the current policy frameworks. It should start with the alignment of energy policies with the targets of the 2030 Agenda, followed by prioritizing technologies to deliver the energy transition in a cost-effective manner. Without creating an enabling investment climate to stimulate private investment, the energy transition will be impossible, particularly with regard to financing the growth of renewable energy and energy efficiency. Long-term energy procurement policies, fiscal incentives such as a corporate tax holiday, and enabling easy access to finance have the potential to derisk capital investment and increase private sector participation. Phasing out fossil fuel subsidy deserves urgent consideration in order to discourage wastage of energy, prevent draining of fiscal resources, and improve the cost-effectiveness of renewable energy and energy efficient technologies. Market instruments, such as a price on carbon or a levy on fossil fuel, are instrumental in generating funds to cover the cost of damage by fossil fuel combustion as well as level the playing field for renewable energy. Finally, regional cooperation is essential to combating some of the crucial policy and technological challenges, such as allowing a higher share of variable renewable energy penetration in the grid by expanding the coverage of an interconnected network.

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