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By Eric J. Lyman
Jan. 19 — Low oil prices can be a boon to renewable energy, United Nations Framework Convention on Climate Change head Christiana Figueres said Jan. 18.
Speaking during the first large multilateral climate talks since the UN's historic Paris climate agreement last month, Figueres called low oil prices “an amazing opportunity” for governments to remove direct and indirect subsidies on fossil fuels.
She said cuts in fossil fuel subsidies could be made without pushing energy prices too high, with some of the savings channeled into incentives for the rapid development of renewable energy sources.
Figueres's remarks, during Abu Dhabi Global Action Day Jan. 18, contradicted conventional wisdom that low energy prices make it more difficult for renewable energy like wind, solar and geothermal power generation to compete with oil, coal and natural gas on price.
The day Figueres spoke, crude oil prices were less than $30 a barrel, a level last seen in 2003. Her comments came during Sustainability Week in Abu Dhabi, which included a meeting of the International Renewable Energy Agency.
The world spends nearly $500 billion annually on fossil fuel subsidies, including tax breaks for fuel company exploration and transport, and subsidies on energy bills for farmers, companies and individuals, according to the Paris-based Organization for Economic Cooperation and Development.
In Abu Dhabi, Ban Ki-moon, the UN secretary-general, said the time for the world to shift its energy needs to renewable energy had come.
“We all know that renewable energy is limitless and will last forever,” Ban said. “It can offer us great security and peace of mind.”
Representatives from more than 150 countries were on hand for the gathering in Abu Dhabi. Officially, the Global Action Day talks were held to help the UN identify ways for countries to reduce greenhouse gas emissions before 2020, when the Paris Agreement on climate change is expected to enter into force. But attendees told Bloomberg BNA that most of the discussions were on ways to boost renewable energy use worldwide.
Figueres said the host United Arab Emirates—which has become wealthy largely from oil-related revenues—has a “historic opportunity” to use renewable energy to diversify its economy away from fossil fuels. Figueres praised the UAE's vow from Paris to move its economy “beyond oil.”
Other UN officials told Bloomberg BNA that the UAE economy has a “tremendous potential” for solar power generation.
But the International Energy Agency said last December that if low oil prices persist, they could delay the development of some kinds of renewable energy, particularly biofuels.
An IEA report released during the Paris climate summit said oil prices would have to stay above $50 a barrel for biofuels to become viable. The report said wind and solar power can be competitive with lower oil prices, but only in advantageous environments.
UN officials said the renewable energy and pre-2020 climate action will be among the central themes tackled at the first meeting of the Ad Hoc Working Group on the Paris Agreement when it meets later this year in Bonn.
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