Long-term strategies in SIDS: blueprints for decarbonised and resilient 1.5°C compatible economies

This briefing outlines why long-term strategies are a fundamental component of national climate policy architecture, and how Small Island Developing States (SIDS) can benefit from developing one, both directly in terms of prioritising efforts for achieving the Paris Agreement goals, and indirectly through synergies with other sustainable development and resilience goals. While we focus here on the energy sector – the largest source of emissions for SIDS – an effective LTS should consider all sectors, as well as the interlinkages between them.

Summary

What are long-term strategies?

Long-term strategies provide a space for governments to set out a visionary blueprint for a resilient, decarbonised future that is compatible with limiting warming to 1.5°C. By setting out such a vision, long-term strategies can steer near-term ambition and action and obtain political buy-in for a cross-sectoral transformation of the economy that is aligned with the Paris Agreement’s goals.

While these strategies are distinct from the near-term commitments made in countries’ Nationally Determined Contributions (NDCs), alignment between the vision contained within a country’s long-term strategy and its NDC is crucial, and can improve the efficiency and robustness of near- and long-term target setting. At COP21, Parties were invited to submit their long-term low greenhouse gas emission development strategies (LT-LEDS or LTS) by 2020. As of January 2021, 29 have already done so, including three SIDS.

Long-term strategy as a means of sectoral transformation in Small Island Developing States

For the majority of Small Island Developing States (SIDS), most emissions come from the energy sector. In this context, the main lever for reducing emissions will be a phasing out of diesel fuel or residual fuel oil in the power sector and gasoline and diesel in the transport sector. For electricity generation, this will be made possible through a future dominance of solar PV and wind, with complementary capacity from geothermal, biomass, hydropower (which are available in certain SIDS such as Dominica, Samoa or Fiji), and/or wave and ocean technologies.

Many SIDS have already started this transition, with solar PV generation on the rise in a number of islands. However, transitioning to a power system with high shares of variable renewable energy (VRE) requires long-term planning to develop the infrastructure necessary to support a new electricity mix. Technologies that are complementary to VRE, such as dispatchable renewables and electricity storage, will be key enablers of a decarbonised system. The financial resources necessary for capital infrastructure investments also need to be in place.

End-use sectors such as transport and buildings will need to decarbonise through electrification and energy efficiency measures.

In the transport sector, this means rolling out the necessary infrastructure (for example, improved public transport and cycling networks, electric vehicle charging stations), as well as implementing policy frameworks for decarbonising the vehicle fleet (for example, incentivising the uptake of electric vehicles (EVs), and disincentivising the import of internal combustion engine vehicles).

In the building sector, the introduction of regulations and standards to increase the effectiveness of building envelopes and incorporate natural lighting, the efficiency of appliances (including air conditioners) can reduce future energy consumption.

Existing buildings will continue to represent the major contribution to energy use, and therefore existing ventilation and air-conditioning systems should be well-maintained and optimised in their operations so as to reduce energy use significantly. New buildings can incorporate envelope designs to reduce energy consumption for cooling, but also to allow greater penetration of daylight, thereby reducing the use of artificial lighting.

A crucial feature of long-term strategies is that they should cover all sectors and allow interactions between sectors to be considered so that visionary thinking and a comprehensive and integrated decarbonisation strategy is put in place.

While the energy sector represents the biggest share of emissions for most SIDS, as it decarbonises, emissions from other sectors such as agriculture, industrial processes and product use, and waste will grow in relative importance. These other sectors also need to be taken into account as part of a long-term strategy.

Benefits and known barriers in the development of LTS

Shift government expenditure and increase energy security:

Most SIDS are characterised by a high dependence on imported fossil-fuels. Shifting away from fossil fuels will reduce fuel imports and increase SIDS’ energy independence, providing direct economic advantages.

The competitiveness of renewable electricity:

An illustrative scenario developed for the purpose of this briefing shows that overall an increasing penetration of renewable technologies can lead to significant decreases in the cost of electricity. The lower cost of decentralised renewable energy systems can also be an important lever to extend electricity to populations without access and in locations where extensions of the centralised grid are cost-prohibitive.

In the transport sector, ramping up the EV penetration in the fleet can lower the end-user fuel bill as costs per kilometre for electric vehicles are less than those of gasoline or diesel in nearly all regions and countries. However, this might be jeopardised by a potential increase in imports of low cost, high-emitting cars from markets that have decarbonised their fleets, unless relevant policies are put in place.

Planning for deployment of dispatchable renewables and sector coupling:

Many SIDS have the challenge of not being able to rely on interconnected grids to balance power supply and demand, and assessing the potential of dispatchable renewables such as hydropower, geothermal, marine power and others, will be a key element in their long-term planning.

Energy storage capacity combined with smart-grid technologies is an option for complementing variable renewable energy. These will be essential for providing grid stability by allowing the storage of excess electricity produced by non-dispatchable sources such as solar or wind, but will also enable the increase of renewable capacity potential and assist the grid operators in matching demand and supply. Currently, the main storage technologies available include batteries, pumped hydropower (in some selected locations), hydrogen and, where necessary, thermal heat storage.

Short- and mid-term policy planning through LTS:

Planning a fully decarbonised energy system on the long run highlights the potential and need for fostering a high uptake of renewable energies by 2030, as well as electrifying end use sectors in the mid-term. Renewable energy targets, policies and programmes for the medium term to 2030 will play a key role in the completion of the long-term pathway.

Reaching a 100% renewable energy share in power generation by 2050 will require detailed, but flexible planning for both dispatchable renewable energy and storage technologies in the near- to mid-term. Unless the necessary incentives and policy measures for enabling the deployment of dispatchable renewables, storage and interactive grids are put in place in the near-to-medium term, the deployment of large amounts of variable renewables will not be possible without endangering the stability of the distribution network. On the other hand, simply relying on fossil fuel technologies to support variable renewables risks being saddled with high-emitting stranded assets.

In the transport sector, policies and incentives will need to be implemented to enable the early sales of EVs especially facing the threat of increased imports of discarded internal combustion engine vehicles from countries that move toward EVs. To reach the goal of a fully electrified fleet of light duty vehicles and buses by 2050, EVs must be 100% of sales by 2040 at the latest, and around 70% of sales by 2030, considering the long lifetime of vehicles.

Planning and ensuring resilient infrastructure:

Long-term planning is intrinsically linked to the planning of resilient infrastructure. This is particularly true for SIDS due to their vulnerability to extreme events and dependence on imports. Diversifying the power mix towards renewables, especially when spatially distributed, can provide greater resilience compared to a centralised energy distribution, with potentially faster restoration when damaged.

According to the World Bank, investing in large-scale centralised power plants without taking their future resilience into account would be more costly in the long run than if resilience measures were considered from the outset due to the increasing threat of damages. Poorly planned infrastructure investments could expose a country to higher costs in the future, especially when required to restore damaged infrastructure. The additional up-front investment needed to make infrastructure more resilient is estimated to be small for low- and middle-income countries, in the order of 3% of expected investments.

While it is difficult to foresee exactly which technologies and policy levers will be most effective in 2050, a well-designed LTS should outline the priorities of a country’s low emissions development toward that horizon, which in turn should guide the selection of policies and measures to get there. Having an LTS in place that has been developed as part of an inclusive process with significant stakeholder buy-in can provide governments with a well-defined direction in which the country wishes to move.

While long-term strategies might be subjected to short-term political change, embedding long-term targets into national law, with a regular review process, will help ensure their longevity and implementation.

When unforeseen events such as the COVID-19 pandemic occur, an LTS can help to shape a country’s recovery by providing a vision against which the recovery can be aligned. For example, the priorities laid out in an LTS can focus attention on using recovery packages to facilitate the transition to a decarbonised and resilient economy, rather than on short-sighted fossil fuel developments. In the face of accelerating climate change impacts, it will be important for long-term strategies to be constructed such that they take vulnerability and exposure to these impacts into account and maximise resilience across sectors.