The Big Shift Global’s vision
is for all people to have access to clean and affordable renewable energy. We
want a world without illnesses from pollution or fear of climate change from
carbon emissions. More than a billion people in the world still don’t even have
electricity, let alone clean energy, so there’s a long way to go. The
development of oil, gas, and coal energy must stop in order to avoid the worst
ravages of global warming, 80 top economists said a few days ahead of a climate
summit in Paris. “We call for an immediate end to investments in new fossil fuel
production and infrastructure, and encourage a dramatic increase in investments
in renewable energy,” they wrote in a declaration.
These multilateral development banks (MDBs) agree that climate change is
affecting the poorest people on the planet, and have goals to end extreme
poverty globally within a generation. However, they still support projects that
contribute to climate change.
Pakistan imports at least 80% of fossil fuel required for its energy needs and
this import category contributes makes a very significant portion of our import
bill that has to be paid in foreign exchange. We know that renewable energy is
already competitive or cheaper than energy generated with fossil fuels. And with
no end to foreign exchange crisis in sight any time in near future, Government
of Pakistan must ban any new fossil fuel energy generation investments in the
country because fulfilling fast increasing energy needs with new fossil fuel
generated energy will continue to exacerbate the already existing foreign
exchange crisis. Just like in many European countries, government should give
generous incentives towards renewable energy generation investments. And this
will also help us become more responsible in playing a good role towards
controlling global warming. Basically these are the salient points of this
discussion.
1. Fossil Fuels are imported from abroad and worsen our trade imbalance.
Decreasing value of our currency can have dangerous consequences in terms of
economic instability, inflation and inflating foreign loans. All of these can
have extremely bad social and economic repercussion for people of Pakistan.
2. Due to recently introduced technologies, renewable energy is already cheaper
than fossil fuels.
3. Fossil fuel energy generation also adversely affects our environment and
causes global warming. And Pakistan is among the countries that would be most
adversely affected by global warming.
4. So government should make a coherent plan to encourage renewable energy
investments and also phase out fossil fuel generation both because of trade
imbalance and negative effect to our environment. Please reconsider all the
pipeline projects after taking into account the interest of our country.
5. With uncertain and deteriorating foreign exchange rate, the cost of
electricity from fossil fuels will continue to increase making electricity
expensive and it will negatively affect our industrial competitiveness and
decrease exports putting us into a downward economic spiral. This is one reason
that decreasing our foreign exchange rate does not help exports because many
times energy costs for the industry also increase simultaneously. And there is a
lot of upward pressure on industry inputs prices due to inflation that follows a
decreasing exchange rate. And we have to add to it the negative consequences of
increasing electricity cost to poor and middle-class households.
6. For the renewable energy, only fixed costs are most significant and renewable
energy generation cost does not have the uncertainty that is associated with the
imported fossil fuels energy generation cost because renewable energy generation
costs do not depend on imported fuel and therefore are not highly sensitive to
deteriorating foreign exchange rate scenarios.
On April 16th, Chinese investments in Pakistan through the much-vaunted
China-Pakistan Economic Corridor (CPEC) were revised upwards, from $46 billion
to a whopping $62 billion. The project, part of China’s ambitious Belt and Road
initiative to invest in trade routes from Asia to Europe, has huge implications
for Pakistan’s development prospects. As part of CPEC, Beijing plans to build
new industrial parks, railways, and roads to link its Xinjiang region with
Pakistan’s port city of Gwadar. But instead of giving cause for celebration, the
colossal Chinese investments heading to Pakistan have sparked massive protests
from locals and environmentalists. Why? Because of Beijing’s senseless decision
to use part of the funds to build outdated coal power plants.
Since Pakistan boasts more than 175 billion tons of coal (equal to Saudi
Arabia’s oil deposits in terms of heating value), harnessing its energy reserves
is crucial to ensure the country’s economic development. Currently, Islamabad
only generates 0.1 percent of its energy needs from coal, relying on expensive
coal and LNG imports, as well as 4 nuclear power plants and substantial
hydroelectric dams to power its economy. However, instead of opting for cutting
edge technology, the Chinese decided to build 10,000 MW worth of subcritical
coal-fired plants (sub-CPC), an obsolete way of burning coal that ranks among
the most polluting ways of generating energy.
Some have questioned the rationale behind Pakistan’s embrace of coal when it
could be turning towards renewable energy solutions like solar panels. But
India’s experience with bringing electricity to its rural communities shows the
limitations of this approach. The government has met 77 percent of its target to
connect villages to power grids, but has only met a dismal 14 percent of its
goal for villages designated for off-grid power like solar. Many villages that,
for a short time, enjoyed life on the grid have now plunged into the darkness
once again as solar panels, wind turbines, and the like fell victim to theft,
damage, and disrepair. It’s understandable that India has prioritized clean coal
technology rather than unreliable renewables as part of its goal to increase
power capacity. And it’s logical that Pakistan, too, is prioritizing coal as a
way to expand access to electricity.
Again, this is where Pakistan should have taken a leaf out of India’s playbook.
India has already made significant headway in addressing the need to balance its
reliance on coal with concerns about pollution by successfully blending fossil
fuels with its climate change commitments. Late last year, New Delhi announced
that it would be phasing out all old, inefficient power plants to replace them
with supercritical ones over the next five years as part of its plan to reduce
emissions.
It’s clear that Beijing recognizes the importance of leveraging the latest
advancements in clean coal technology. However, they should be using their
expertise and cash to push Islamabad in the same direction – not funding the
construction of outdated, subcritical plants. With Beijing breaking new ground
with several new energy plants in Pakistan, it should use its clout and know-how
to bring power to the people in the most sustainable way possible. Otherwise,
Pakistan could end up with an inefficient short-term solution to a long-term
question.