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Energy democracy: a win-win solution
20/03 - 2017

Energy democracy: a win-win solution

Clean energy and efficient solutions are bridging the gap between ecology and economy. Giving people a stake in their energy future - energy democracy - is powerful and opens up new opportunities for clean energy, jobs and innovation. Now we need pioneers to bring forward ideas and make them happen. Events such as the Berlin Energy Transition Dialogue are the perfect stage to help them do that.

Almost a decade ago, Sir Nicholas Stern described climate change as the result of market failures that will ultimately pose huge costs on our society. He emphasized that urgent promotion of rapid technological advances was key to climate change mitigation. And while we remain a long way from a full market correction, there are signs that we may be reaching a turning point.

Figures just released by the IEA show that for the third straight year global carbon emissions have remained flat while the global economy has continued to grow. It is evidence of a continued decoupling of global emissions and economic activity.

And while recognition is growing as to the enormous opportunities that energy transition is bringing, it is not without risks; if governments are getting serious about climate change, as ratification of the Paris climate agreement suggests, then the market value of the companies that own the fossil fuel reserves are vastly inflated, and this could cause a massive market shock.

One system moving energy transition forward could also serve to insulate against such a shock. Widely embraced in Germany, the concept of energy democracy is a grassroots movement with clean and efficient energy solutions at its heart. It is characterised by public participation in energy transition, decentralisation of those energy systems, and strengthened local ownership.

Strong public support is providing fertile ground for startups to develop ideas while catering to local conditions - such as amount of sunlight, lots of wind, or flowing rivers. It can then be scaled while remaining rooted in localities, offering job opportunities and ensuring citizens retain a stake in its success.

Energy transition is also creating a demand for increased infrastructural investment, which is central to economic activity and is a reliable long-term investment. As governments look for ways to energize their economies, this seems like a sure bet; a report released last year by New Climate Economy recommended that “Investing in sustainable infrastructure is key to tackling the three central challenges facing the global community: reigniting growth, delivering on the Sustainable Development Goals, and reducing climate risk in line with the Paris Agreement.” They estimate that in the next 15 years, the global economy will invest some US$90 trillion in infrastructure.

Germany and its citizenry, more so than any other country, is embracing the clean energy transition. That an idea like energy democracy - which upends traditional thinking about public utilities - enjoys such widespread support is heartening. We need pioneers to make the most of the opportunity it allows for to disrupt traditional energy markets. In doing so, they will help others to understand its possibilities, and develop their own ideas and visions for how to make it a success in their communities.

>>> Bertrand Piccard was the keynote speaker at the Berlin Energy Transition Dialogue, held from March 20-23, 2017.


Image: © Jutta Benzenberg/World Bank via Flickr