Climate Change Mitigation in the Power Sector

The United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Accord aim to limit global warming to no more than 2 C, and ideally 1.5 C, above pre-industrial levels. This requires a 7.6% cut in GHG emissions each year from 2020 to 2030, with decarbonization of the power sector being a crucial step towards achieving this goal. The power sector is the largest source of energy-related CO2 emissions, accounting for 2/3 of global emissions, with coal representing 30% of global energy-related CO2 emissions. To help the power sector reduce GHG emissions, innovation and investment are essential. Substantial investment is required to implement renewable energy targets contained in Nationally Determined Contributions (NDCs) worldwide, with more than USD $1.7 trillion needed by 2030, mainly in Asia and Africa. Countries have submitted NDCs to the UNFCCC, with 103 of these including power-sector targets. NDCs embody efforts by each country to reduce national emissions and adapt to the impacts of climate change. Asia and Africa regions need the most support to develop carbon markets and economic instruments for mitigation action. To achieve global GHG emission reduction goals, annual energy-related CO2 emissions need to decline by 70% below today's levels by 2050. USAID missions can engage with partner countries to support the development and implementation of their NDCs, particularly in the power sector. This can involve modifying program design to prioritize decarbonization, clean energy technology, and focusing away from coal and natural gas. USAID can also support private sector engagement strategies to channel corporate commitments to counterpart needs, create a clean energy export and climate investment initiative, and provide support for de-risking of power sector entities relative to low carbon development. The power sector is inextricably tied to global emission reductions goals, and NDC power targets must be more expansive than simply increasing renewable energy targets. The power sector requires substantial investment to meet climate mitigation targets, with more than USD $1.7 trillion needed by 2030 to implement renewable energy targets contained in NDCs worldwide. This investment can be achieved through innovation, energy supply chain infrastructure, investments, regulations, and policy. USAID's Strengthening Utilities and Promote Energy Sector Reform (SUPER) Task Order can help missions address power sector climate change priorities. The SUPER Task Order can provide support for de-risking of power sector entities relative to low carbon development, create a clean energy export and climate investment initiative, and engage ministries on NDC commitments and assist with updating. By engaging with partner countries and supporting the development and implementation of their NDCs, USAID missions can help the power sector reduce GHG emissions and contribute to global efforts to mitigate climate change.