Integrated and non-climate policies and co-benefits of mitigation policies

Co-benefits of GHG mitigation in the energy supply sector can be substantial. When applying cost-effective energy-efficiency measures, there is an immediate economic benefit to consumers from lower energy costs. Other co-benefits in terms of energy supply security, technological innovation, air-pollution abatement and employment also typically result at the local scale. This is especially true for renewables which can reduce import dependency and in many cases minimize transmission losses and costs. Electricity, transport fuels and heat supplied by renewable energy are less prone to price fluctuations, but in many cases have higher costs. As renewable energy technologies can be more labour-intensive than conventional technologies per unit of energy output, more employment will result. High investment costs of new energy system infrastructures can, however, be a major barrier to their implementation.

Developing countries that continue to experience high economic growth will require significant increases in energy services that are currently being met mainly by fossil fuels. Increasing access to modern energy services can have multiple benefits. Their use can help improve air quality, particularly in large urban areas, and lead to a decrease in GHG emissions. An estimated 2400 GW of new power plants plus the related infrastructure will need to be built in developing countries by 2030 to meet increased consumer demand, requiring an investment of around 5 trillion US$ (5 x 10¹²). If well directed, such large investments provide opportunities for sustainable development. The integration of development policies with GHG mitigation objectives can deliver the advantages mentioned above and contribute to development goals pertaining to employment, poverty and equity. Analysis of possible policies should take into account these co-benefits. However, it should be noted again that, in specific circumstances, pursuing air-pollution abatement or energy security aims can lead to more energy use and related GHG emissions.

Liberalization and privatization policies to develop free energy markets aim to provide greater competition and lower consumer prices but have not always been successful in this regard, often resulting in a lack of capital investment and scant regard for environmental impacts (high agreement, much evidence) [4.2.4; 4.5.2; 4.5.3; 4.5.4].