According to a recent report, achieving net-zero greenhouse-gas (GHG) emissions globally by 2050 will require annual investments of $9.2trn—approximately 50% more than current spending. Failure to quickly install these new sources of energy will impede the world’s efforts to mitigate and adapt to climate change—a delay the world cannot afford.
Scramble for land
The problem is that infrastructure based on renewable sources of energy—solar, wind, biomass, hydropower—is not without its own environmental and social challenges. Of the many known and unknown harms, conflict over land is certainly among the most significant. Given the expansion of utility-scale renewable-energy resources that is required to meet net-zero targets, the ravenous need for land will inevitably compete with agriculture and ecosystems. In India, for example, about three-quarters of past solar installations were sited on areas that had natural ecosystem preservation or agricultural value. The country has an ambitious target of reaching 500 gigawatts of solar-energy capacity by 2030—a feat requiring a tripling of annual new capacity—and the worry is that new infrastructure will continue to gobble up otherwise productive and valued land.
Meanwhile, in Oaxaca, Mexico, where the world’s greatest wind-power companies congregate to take advantage of the favourable wind corridor, numerous adverse impacts have gained attention, including energy poverty, land-take without consent of Indigenous peoples, reneged-upon promises for amenities, and ongoing conflicts (some armed). How can we address the environmental and social challenges posed by renewable-energy infrastructure expansion without jeopardising the larger ambition of the energy transition?
This is not a new problem. Historically, many large-scale infrastructure projects have created unintended and at times lasting negative environmental and social consequences. The devastating environmental destruction and massive displacement of people with ruined livelihoods from large dam projects, such as the Sardar Sarowar dam in India and Yacyreta dam in Argentina, are unfortunate reminders of past practices. These must not be repeated.
Safeguard shortcomings
Over the last four decades, the response to this conundrum has been to establish increasingly stringent rules, regulations and other safeguards to avoid, minimise or compensate for these damages. Invariably, centre-stage among these safeguards has been the process of environmental—and later environmental and social—impact assessments (ESIAs), intended to inform and improve decision-making by governments, project proponents, lenders and the public. When properly applied, these EISAs have provided meaningful input at the project level.
But given the urgency of getting renewable-energy infrastructure online to reduce GHG emissions, ESIAs alone cannot be expected to address the shortcomings of solar and wind projects. ESIA safeguards tend to be applied too late in the infrastructure project cycle, after critical decisions, such as project site selection, have already been made. They can also be used by project opponents to stall infrastructure development by years or even decades. Furthermore, the ESIA process necessarily focuses on project-level issues, but this encourages fragmented and myopic perspectives on impacts rather than strategic and systemic ones, which are necessary for landscape-scale installations and placement of multiple projects.
Plan and prioritise
A new mindset is needed that shifts away from the business-as-usual approach of using safeguards and regulations to minimise negative impacts of infrastructure one project at a time, towards practices that plan and prioritise projects with the greatest societal and environmental benefits. Such an approach could help avoid critical natural habitats, identify and address stakeholder needs early in the project cycle, ensure benefits for people, and possibly accelerate project approval and implementation.
To encourage countries to better incorporate societal and environmental benefits into their infrastructure development, Economist Impact, supported by Deloitte and Duke University’s Nicholas Institute for Energy, Environment & Sustainability, launched the Infrastructure for Good barometer (IFG), It ranks countries across a range of conditions affecting their ability to advance infrastructure for good, including governance, finance, and social, environmental and economic considerations. This barometer reflects a shift away from the traditional approach of carrying out ESIAs that are all too often reduced to checklists, towards collecting indicators focused on the conditions necessary to develop infrastructure for good.
Robust foundations
One key theme of IFG is the need to consider “upstream” conditions during the earliest stages of the infrastructure project cycle—that is, the pre-project planning phase—before financial and political interests have become vested in specific projects. The IFG barometer has indicators to measure a country’s attention to upstream activities such as national infrastructure planning and strategic ESIAs. For the energy transition, this type of upstream planning can be used to identify and prioritise land-use needs and renewable-energy infrastructure deployment that provide the greatest societal benefits.
Consider again the case of India: a recent study demonstrated that, with careful early-stage planning and technical capacity, India can reach its aggressive solar and wind deployment goals by strategically building new infrastructure on lands already degraded by human activities, thus reducing land-use conflicts and negative environmental and social impacts. In the US, recent models identify a path for the country to deploy sufficient new utility-scale renewable-energy resources to meet its national net-zero GHG target by 2050 while minimising development on intact landscapes or prime farmland.
Land-use mapping and spatial planning are just the first step. Holistic planning in advance of project development requires taking into account benefits and costs for all stakeholders, especially those who are not well served by existing infrastructure or who will bear the burden of new development with little or no benefits. For example, Denmark scaled up its impressive wind capacity—more than half of its power now comes from wind energy—in part by working with local communities from the beginning of the planning process. The government promoted community ownership of wind turbines; fossil-fuel workers near retirement were offered early pensions; and municipal governments worked with unions to develop re-training programmes. These actions increased public support for wind power. In Canada, several renewable projects involve partnerships and co-ownerships with affected Indigenous communities. Community development plans and funds, established in consultation with local communities, are another way to ensure that benefits flow locally over the life of the project.
Some countries are better positioned than others to embark on upstream planning. Not surprisingly, the countries that scored highest on the IFG barometer in terms of planning were developed ones like Australia and Canada. But some developing countries did well in specific respects and are worth highlighting. For example, South Africa received high scores on the IFG barometer for its focus on its infrastructure planning process, its requirement for strategic and systemic-level studies, and a process of promoting social infrastructure to meet the United Nation Sustainable Development Goals.
The concept of infrastructure for good suggests actions that all countries, developed and developing, can take to avoid conflicts and delays that plague too many renewable projects currently. It also suggests a means of creating tangible benefits for people and communities to meet their long-term needs. These actions in turn enable projects to remain durable and countries to stay politically stable.
Economist Impact plans to update and revise the IFG barometer periodically. We look forward to new data that might show promising correlation between planning, project implementation, benefits delivery, and abundance of investment in renewable sources of energy.
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