More than “just” climate protection

More than “just” climate protection

The socio-economic potential of renewable energies

COP27 made it clear once again that it is still difficult to persuade countries to promote the expansion of renewable energies and reduce the use of coal, oil and gas with climate protection arguments alone. Other lines of argument are also needed for the energy transition. One of these could be “co-benefits”.

Co-benefits arise when “several interests or objectives can be achieved simultaneously as a result of a political intervention, an entrepreneurial investment or a combination of both”^.1 With regard to renewable energies, co-benefits can therefore be understood as those side effects that also occur in other sectors as a result of the decarbonization of energy generation.

There are numerous examples of these positive side effects of renewable energies in a wide range of sectors. For example, their expansion can support the electrification of rural households, help to reduce water consumption and stimulate the development of innovations that are also useful for other sectors. If planned correctly, the expansion of renewables has great potential to strengthen local communities: Households pay less for electricity or can supplement their household budgets through feed-in tariffs for the solar power they produce; students in areas with unstable electricity supplies can use lighting powered by renewable energies to study in the evening and morning hours, while their parents can generate additional income for the family by maintaining solar or wind systems, for example^.2 Renewable energies therefore influence a wide variety of areas of life and policy fields.

The co-benefits of the energy transition towards a RE-based electricity supply are manifold and despite this, or precisely because of this, have not yet been extensively researched. However, their systematic evaluation is highly relevant in terms of both social and climate policy. This is because pricing in all additional effects as accurately as possible shows decision-makers the actual potential behind investments in the expansion of renewable energies and where these pay off twice or three times over.

The co-benefits approach is therefore a key to thinking together initiatives for climate protection in the energy sector and for achieving the Sustainable Development Goals (SDGs), or in other words, the cornerstone for forming new strategic alliances between social and economic departments and energy policy climate protection initiatives. In short, an important building block for a just energy transition^.3

Initial indications of the potential of co-benefits in the energy transition are provided by a total of 13 co-benefit analyses in eight countries, which were carried out in the COBENEFITS project with a total of 18 research partners. The Cobenefits project is a project of the IASS, UfU, RENAC and IET. The evaluation of these studies shows that in the co-benefit categories examined, the expansion of renewable energies in the electricity mix tends to be associated with higher socio-economic co-benefits than a coal-intensive business-as-usual in the electricity sector^.4

Listing all calculated co-benefits would go far beyond the scope of this article. For this reason, two categories of co-benefits are examined in more detail below: The effects of decarbonizing the electricity sector on the labour market and on public health.

The decarbonization of the electricity supply and the labour market

An increase or decrease in renewable energies in the electricity supply has an impact on the labor market. Jobs in mining and the coal, gas and oil sectors are likely to be lost. However, the energy transition also opens up new areas of business and creates many new jobs.

This labor market potential extends first and foremost to the renewable energy sector itself. Around 12 million people are currently employed in this sector worldwide(IRENA & ILO 2021)^.5 This figure could rise to around 38 million full-time jobs by 2030 if renewable energies are expanded to such an extent that they make their contribution to limiting global warming to a maximum of +1.5°C.

Renewable energies also create new jobs outside their own sector. For example, in the production of materials for the construction of wind turbines and solar panels as well as related services (indirect employment processes), but also in other sectors, which in turn benefit from the growth of these upstream industries (induced employment effect).

The COBENEFITS job study for Vietnam impressively shows the job potential of an expansion of renewables: A large solar or wind power plant for electricity generation with a megawatt capacity would create twice as many jobs in Vietnam on average as a coal-fired power plant with the same capacity. Replacing coal-fired power plants with wind and solar energy would therefore have a positive impact on the labor market, not only in Vietnam’s own sector, but also in other industries (see chart). You can find the country report on India here: Country Report India

Results of the COBENEFITS study on the labor market effects of renewable energies in the electricity sector in Vietnam: One MV of installed capacity for electricity generation from coal creates only half as many jobs in Vietnam as the same capacity for the production of wind or solar-based electricity.

The COBENEFITS study on the job potential of renewable energies for Vietnam’s electricity supply also analyzed this. Around 30 percent of all workers needed for the expansion in Vietnam are highly qualified workers, 56 percent are people with medium qualifications (plant operators, craftsmen or office workers). However, renewable energies also create opportunities for low-skilled workers: 14 percent of the workforce required for electricity supply in Vietnam is assigned to this group.

Although the expansion of renewable energies creates the conditions for positive side effects, co-benefits can only be used in the best possible way if framework conditions are set to support their use. Enabling policies contribute to this.

In the Co-Benefits project, the UfU team focused on identifying and developing precisely these enabling policies in the partner countries using participatory methods. We have published a report on the enabling policies, the link can also be found in the appendix to this article.

In the job sector, strategies and programs to attract skilled workers and young professionals to the renewable energy sector, as well as their training and further education, were identified.

The decarbonization of the electricity supply and public health

The deadly effects of polluted air are often underestimated. Yet the figures are clear: the World Health Organization (WHO) estimates that around 7 million premature deaths worldwide each year are caused by indoor and outdoor air pollution^.6 An IEA report also concludes that the energy sector is by far the biggest contributor to air pollution globally^.7 In India, polluted ambient air is now the second biggest risk factor for health^.8

Substances in the air that are hazardous to health are primarily sulphur dioxide (_SO2), nitrogen dioxide (_NO2) and particulate matter (_PM2/PM10). Regular exposure to these pollutants in the air significantly increases the risk of developing chronic diseases and respiratory infections (e.g. asthma), cardiovascular diseases, cerebrovascular diseases (e.g. strokes), as well as type 1 diabetes mellitus and lung cancer^.9 Industrial processes and power generation are the main global sources of _SO2 and _NO2 in the air, while particulate matter emissions are caused by car exhausts, industry, mining or the burning of biomass, for example^.10

According to calculations by IASS and TERI, more than 38,000 people in India, a country with a rapidly growing demand for electricity, are already dying every year as a result of particulate matter from coal-fired power plants, and more than 14 million healthy years of life are being lost. In a business as usual scenario, this figure would rise to well over 50,000 deaths per year and more than 24 million healthy years of life lost by 2050. Only if the electricity sector is decarbonized significantly faster and more ambitiously than stated in the national climate protection plans would deaths not increase but fall to just over 20,000 deaths per year, and more than 7 million years of illness could be avoided in 2050^.11

Conclusion: The decarbonization of electricity production and the prioritization of renewable energies in future energy systems as well as the associated reduction of current and future pollutant emissions can not only contribute significantly to climate protection, but also save hundreds of thousands of lives worldwide and improve the health and well-being of millions more people.

Decarbonization also avoids healthcare costs. If less coal and other fossil fuels are used in the energy sector, fewer people will suffer from the effects of poor air quality, and fewer healthcare services will be needed to prevent, diagnose and treat these illnesses. This directly relieves the burden on healthcare systems. If the cases of illness caused by air pollution are reduced, there are also fewer sick days, fewer days with reduced productivity and therefore less absenteeism. This benefits employers and employees, but also the public purse, as the figures in the following chart for India illustrate^.12 You can find the country report on India here: Country Report India.

Reduced health costs in India, with less particulate matter in the air and decarbonization of the electricity sector. Comparison of two scenarios: A BAU scenario with India’s current climate policy and an NDC Plus scenario with ambitious decarbonization of the power sector. The annual healthcare costs of “business as usual” would increase tenfold by 2050, while the NDC scenario can reduce healthcare costs by around 20 percent in 2050. This translates into savings of 136 quadrillion euros.

These co-benefits in the health sector arise automatically as a result of decarbonization^.13 Above all, enabling policies, i.e. smart legislation, are needed to ensure that as many people as possible benefit significantly from the energy transition in terms of their health: For example, by shutting down the dirtiest power plants or those operating in densely populated areas first through far-sighted planning^.14

Enabling policies for the best possible use of co-benefits

The enabling policies and their implementation must be individually adapted to the situation in the countries and regions concerned. Participation is an important part of this. In joint workshops in all project countries, UfU has networked stakeholders from various ministries, civil society and business in order to jointly prioritize activities that can make a particularly strong contribution to fully exploiting the calculated potential. The results of this process were published in the policy reports of the individual project countries^.15

In addition to policy proposals to maximize the use of sector-specific co-benefits, some measures were also identified that support the exploitation of all co-benefits and cannot have a negative effect.

Probably the most important measure is to strengthen cooperation between different government departments. In many countries, the energy ministry is responsible for planning the electricity sector. The costs of the energy transition are therefore often primarily reflected in its budget – be it in the form of investments or increasing personnel and planning costs. However, the positive effects and avoided costs of decarbonization are often the responsibility of ministries that are not directly responsible for energy planning. As a result, there is often no internal incentive in the energy ministry to take co-benefits into account in energy planning – this must come from outside through other ministries and from civil society^.16

Initial ideas for overcoming this dilemma could be the establishment of a format for continuous, cross-departmental and targeted policy planning, coordination and cooperation for co-benefits. The Co-Benefits Councils (CobCons) initiated in the project, regular inter-ministerial meetings to network state energy planning with other departments, are positive examples of this.