CCG Priority Themes and Policy Briefs
Our engagement in COP28 focussed around four priority themes, which had featured prominently in our work in 2023 and which we felt were particularly relevant to the current global climate debate:
- Since COP28 is located in the Persian Gulf this year, we wished to draw attention to the development predicament of LMIC fossil fuel producers in a low-carbon world. Our paper How can the global community support LLMIC fossil fuel producers through the climate transition? had recently been accepted for publication in Nature Energy and a Policy Brief based on this is available to download here.
- With insufficient global climate finance flows reaching the Global South, we highlighted emerging integrated approaches to supporting LMIC climate transition from Data-to-Deal. We have a new Policy Brief called Data-to-Deal: How can Countries in the Global South Afford the Climate Transition?
- As transport decarbonization continues to prove particularly challenging to implement, we will explored new tools for co-creating transition pathways in the Global South.
- Given the pivotal role of global green grids in the energy transition, we shared new thinking on the case for cross-border inter-connectors and how they can capture more climate finance. We also partnered with the Green Grids Initiative and others to launch the Electricity Transition Playbook. This is a unique approach, which has been tested thoroughly with relevant stakeholders, and which provides a roadmap to successfully achieving a clean electricity transition within a country.
- Throughout our discussions we emphasised the importance of building skill and knowledge capacity among policy professionals in each country. We do this through our Energy Modelling ‘Summer Schools’ in which we provide training in several energy modelling tools such as OSeMOSYS, MAED and FinPlan. See our complete Energy Modelling Offer here.
- With the launch of our brand new Catalyst Facility, we are looking to expand skills capacity building activities in our partner countries and embed them in local universities and other institutions. That way local policy teams and academic colleagues will become autonomous and no longer dependent on consultants or other external support. Read our Catalyst Facility briefing here.
Fossil Fuels
A global agreement on fossil fuel phase down had proved elusive, going into COP28. For producing and consuming countries alike, fossil fuels are deeply embedded in the fabric of the economy, and any adjustment will be costly. Among LMIC fossil fuel producers, in particular, there are concerns that reducing fossil fuel production and consumption will unfairly jeopardize development prospects and delay the achievement of energy access goals.
Our new research examined the distinctive economic challenges posed for different categories of LMIC fossil fuel producers, identified the diversification challenges posed for each type of producer, and explored how the international community could best support this transition.
Briefs
Our COP28 Policy Brief How can the global community support LLMIC fossil fuel producers through the climate transition? is available to download here.
We also refer interested readers to the related forthcoming research paper Development and transition pathways for fossil fuel-producing low and lower-middle income countries in a carbon-constrained world.
Data-to-Deal:
The expression ‘Data-to-Deal’ refers to support actions taken throughout an entire process that runs from data collection, system modelling, and development planning, all the way through to national financing strategies and project finance arrangements to the agreement of a deal (contract), all driven by a strong stakeholder engagement process. The concept highlights that a successful net zero transition calls for concerted and coordinated action along the entire investment pipeline.
Based on extensive stakeholder engagement and new evidence from successful country cases, our work has focused on distilling the government actions that lie on the critical path from data-to-deal, as well as identifying the most valuable kinds of support that can be provided by the international community at each stage. We particularly highlight the need for closer collaboration between Ministries of Energy and Finance to ensure that climate transition plans are financially feasible.
Briefs: Data-to-Deal: An Emerging and Effective Approach to Supporting LMICs in Climate Transition
Summary: Developing nations face many challenges in securing climate finance at the scale needed. An emerging approach – known as ‘Data-to-Deal’ – highlights the importance of providing countries with sustained and holistic support along the entire investment pipeline, from upstream technical plans to downstream financing strategies. In practice, this entails securing high-level political support for decarbonisation, laying the foundations of institutional capacity in-country, aligning climate objectives with broader development plans, and undertaking deliberative quantification of scenarios. It also involves engaging inclusively across stakeholder groups, strengthening the policy and regulatory environment, and developing credible investment plans and financing strategies.
In addition, read our companion brief Data-to-Deal: How Can Countries in the Global South Afford the Climate Transition? which explores the energy-finance interface in greater depth.
Transport Decarbonization:
To date, much of the effort on modelling and planning for the net zero transition has focused on the energy sector. However, transportation represents the next largest source of emissions, with much of the projected growth coming from LMICs. The process of decarbonizing the transportation sector is relatively complex and not yet well understood, particularly in the context of LMICs.
Our research is helping to provide new modelling tools that explore alternative pathways and levers for transport sector decarbonization in LMICs, with interesting emerging applications in Africa and Asia.
Briefs:
Developing Fit-for-purpose Analytical Tools to Support Transport Sector Decarbonisation in LMICs
Summary: When attempting to make decisions regarding alternative low-carbon development pathways for the transport sector, modelling tools can be of enormous benefit by providing analysis and creating scenarios. Several models have been developed around the world, but these are primarily orientated towards OECD countries, and so are less well-suited to representing transport sector realities in low- and middle-income countries (LMICs). To be fit-for-purpose, models for LMICs need to reflect the distinctive characteristics of their transport sectors (for instance informality) and the policy needs of each country.
The models need to be calibrated with appropriate parameter values (such as longer vehicle lives), provide a level of detail commensurate with limited local data availability, and ideally build on open-source software to reduce cost and promote accessibility. While some progress has been made in adapting transport sector models to LMICs, no transport sector model currently available fully meets all these criteria. CCG with its partners is working towards the development of such tools.
Another brief, with details of a pilot application in Kenya, is now available for download: Towards equitable climate-compatible transport pathways in Kenya: modelling co-created scenarios using TEAM-Kenya
Global Green Grids:
The Global Green Grids Initiative was launched at COP26 in recognition of the critical role of cross-border power trade in facilitating the expansion of renewable energy. Our latest research models the entire global power system and examines the economic case for different regional and intercontinental power cables and their relative importance in contributing to the energy transition.
This research provides an intellectual basis for identifying the carbon savings associated with different interconnector projects, with a view to unlocking access to climate finance for these essential infrastructure projects.
Briefs:
Financing green grids is critical to support a Paris-aligned energy transition
Summary: Investment in electricity grids, including transmission, distribution, and interconnection projects, will be key to scaling renewable electricity supplies needed to meet national development goals as well as Paris decarbonisation goals.
This policy brief highlights the role that climate finance can play in helping scale grid investments. It focuses particularly on emerging and developing economies. In many cases these economies have high projected growth in electricity demand, which could be met cost-effectively with renewables, but the necessary grid investment may be excluded from current climate financing rules because of high levels of fossil fuels in their existing generation mix.
Changes are therefore required to how green grids are defined in these contexts. In some cases, this will require the use of energy systems analysis to help determine the economic and carbon benefits of projects. At COP28 we shared experiences of how this can be done in an inclusive way using open-source tools in collaboration with key stakeholders.
Electricity Transition Playbook:
It is widely agreed that clean electricity will play a major role in meeting global energy needs in the future. However, there are many barriers to overcome before this potential can be realised. And we must overcome them together.
Right now, annual investment in grids globally is just $300bn when it needs to be $600bn by 2030. Within Emerging Markets and Developing Economies it’s just $70bn but needs to be $300bn by 2030, to be on track for the 1.5ºC target. This may seem a lot, but the cost of delay will be in the trillions.
In order for nations to meet their sustainable development goals, they have to overcome a wide range of challenges including collecting data, developing energy modelling skills and changing policy. On top of this, they have to convince colleagues that the energy agenda can support other vital developments such as economic growth, employment, education and health. Then they must convince potential investors to fund them.
The starting point for joining the ETP community is a free online course taken via the Open University. This will deliver state of the art knowledge to you and your team on the building blocks of electricity transitions. Following this, the ETP community provides you with ongoing access to a group of experts all facing similar challenges. Becoming part of ETP will enable your team to be at the forefront of the electricity transition.
It is a practical guide to help you navigate through the complex journey of the electricity transition. It’s a tailored approach to shape the electricity landscape of each nation. It features nine interconnected building blocks of electricity transition with resources for each. It provides a Progressive scorecard to empower each nation to measure its readiness for transition. And it has a community of growing knowledge to share best practice and support each other.
Briefs:
Summary: This leaflet provides a detailed overview of how the Electricity Transition Playbook will work and all the elements that make up this comprehensive approach to building skills among policy and energy ministry teams.