Three Benefits of a People-Centric Energy Transition in the Global South
As the next climate summit returns to Africa, with COP-27 hosted by Egypt in less than three months, the world seems to be at a crossroads between energy security and energy transition. The Global South is directly dealing with the costs and benefits of this dilemma.
On the one hand, the war in Ukraine has driven up oil and gas prices with profound changes in the global energy system. Yet on the other hand, the conflict seems to be literally fueling a fossil narrative in Africa, Small Island Developing States, and Southeast Asian nations ready to seize the opportunity to invest in oil, gas, and even coal.
In these resource-rich countries blessed with fossil fuels, such as Nigeria, Trinidad and Tobago, and Indonesia, RMI’s past work in the Global South has shown that oil and gas investments might make some economic sense in the short term. But economies worldwide that heavily rely on oil and gas imports become highly vulnerable to economic shocks in the long run.
In advocating for a nuanced approach, we must not only focus on cost comparisons of energy technologies, such as the levelized cost of electricity between renewable and fossil fuel sources, but also consider any co-benefits. Three benefits resulting from clean energy portfolios are job creation, a just transition, and joint innovation. These opportunities help address the overlooked challenge of workforce development, which, ahead of both New York Climate Week and COP27, RMI sees as key to deliver on what we now call radical implementation.
Job Creation: Developing Tomorrow’s Workforce, Today
Several studies before and after the COVID-19 outbreak have modeled and documented the greater number of jobs created by investing in renewable energy and energy efficiency than by investing in oil and gas.
In 2017, the Political Economy Research Institute found that for each $1 million of spending, 7.49 full-time equivalent (FTE) jobs were created in renewable energy and 7.72 in energy efficiency. This contrasts with the 2.65 FTE jobs generated by fossil fuels, and indicates that clean energy creates a net increase of five jobs per $1 million of investment over conventional energy.
A 2020 review of fiscal recovery packages alerted us of the consequences and contribution to the climate emergency of a fossil-fuel intensive response to COVID-19. It identified five high-impact policies related to rural development in low- and middle-income countries with joint social, economic, and environmental multiplier potential. These policies cover (1) clean infrastructure, (2) building efficiency, (3) training and education, (4) natural capital, and (5) clean energy research and development (in G20 countries).
With the initial focus on health emergency response and economic stimulus following months of global pandemic lockdowns, a net-zero, nature-positive, and socially inclusive narrative has emerged, which is grounded on science, not mere advocacy. As the Global South considers how to exercise its right to economic development, in the face of its lower carbon footprint than OECD countries historically and currently, this evidence can inform the social choices made for people in Least Developed Countries (LDCs), Small Island Developing States (SIDS), and emerging economies.
They will disproportionally bear the brunt of the climate emergency when, instead, they could lead their own solutions to the energy transition. RMI’s Energy Transition Academy (ETA) focuses on one overlooked challenge and opportunity of the transition: workforce development. We do not have enough professionals to build the sustainable energy infrastructure of the future today. We are addressing this gap in SIDS with our inaugural ETA Fellows from Nigeria and the Caribbean. And through the Africa Minigrids Program, the ETA has the potential to expand to over 20 countries representing half the 750 million people without electricity worldwide.
African nations improving livelihoods with distributed energy resources
According to the International Renewable Energy Agency (IRENA), Nigeria’s Solar Power Naija project will create 250,000 jobs through the provision of solar home systems and minigrid connections to 5 million rural households, and support local solar assembly and manufacturing worth US$10 million annually in import substitution. Meanwhile, Ethiopia’s deployment of renewables in horticulture, wheat, and dairy sectors can create 190,000 jobs in the value chain, while increasing production capacity and decreasing losses. Past RMI analyses on electrifying agriculture in Nigeria and productive uses of energy in Ethiopia support this potential.
Just Transition: Empowering Women and Young Leaders
In addition to employment generation, the energy transition provides an opportunity for climate justice and inclusive outcomes. RMI focuses on not only how many jobs can be created, but also for whom. Key research on renewable energy and jobs points to better gender outcomes. As women represent more than a third of the clean energy workforce worldwide, in contrast to the average 20 percent participation in the oil and gas sector, the 2021 IRENA Annual Review supports an energy transition inherently more inclusive.
Such statistics support decision-making toward energy investment that also provides opportunities for the youth, minority, vulnerable, underserved, and marginalized population in the Global South. As countries consider whether to invest in fossil fuels or clean energy, IRENA estimates that in a 1.5°C Paris-aligned scenario, 60 million of the jobs created by 2050 (half of the total) only require primary or lower secondary education, an opportunity for a larger social segment.
Caribbean countries modeling an equitable transition through women’s empowerment
A 2021 RMI report drawing on experiences in SIDS highlights the importance of including job training programs in projects to increase equity. It recommends tailoring education and professional development to the needs of underrepresented groups in the energy sector, like indigenous women did in Belize. Mayan leaders in the Toledo District got certified as solar light engineers, set up a company, and installed more than 100 solar energy systems in rural communities, with operation and maintenance carried out by trained women — a model for gender equality and women empowerment that has been replicated across other islands. The Women in Renewable Energy (WIRE) Network includes around 600 island women leaders, which allows for the rapid expansion of such initiatives through mentoring, coaching, and awareness-raising.
Joint Innovation: Building the Capacity for High Local Content
A focus on local content has typically existed in the energy sector. In addition to domestic workforce development, fossil fuel industries have struggled to increase locally driven value chains, like in Nigeria. The hydrocarbon sector is more capital-intensive than the labor-intensive potential of clean energy technologies. Global energy insecurity, supply constraints, and the unavailability of materials and equipment highlight even more the importance of local value chains. The ability to localize or regionalize the skills and firms along the energy supply chain is determined by its human resource requirements. With renewable energy relying more on lower certification and specialization than oil and gas, the investment in solar or wind electricity generation favors local job creation.
In choosing whether to invest in non-renewable or renewable energy sources, oil and gas lends itself to the generation of expatriate employment or the introduction of internationally based firms, thus importing foreign business practices and technical competencies into the Global South. There can be long-term consequences of these industrial policy decisions, especially for countries with human capacity constraints, both in quality and quantity of local firms, labor supply, or limited skill base.
Southeast Asian economies show leadership in local content and technology adaptation
Solar photovoltaic technologies represent the largest category of renewable energy employment (33% of the total, with 4 million jobs generated in 2020 per IRENA research). For countries like Vietnam, among the top five economies globally in solar PV jobs, it also underscores the opportunity developing countries have to lead in technology deployment. As Vietnam is also among the top solar PV installers (11.6 GW in 2020), and exports to energy giants China, India, and the United States, this clean energy potential provides a path for the country to manage its transition out of coal. RMI’s 2021 report on financing the coal transition provides recommendations for countries such as Indonesia and others to ensure that the solutions are also just and equitable.
RMI advocates for local ownership in making that choice, in line with our bottom-up approach. In the Pacific and Caribbean regions, the ETA and CFAN (Climate Finance Access Network) help SIDS constrained by population size and specialization expertise design nationally appropriate mitigation and adaptation technology investments, optimizing limited human and financial resources at the scale, speed, and impact their countries demand. A key feature of the ETA and CFAN offering is alignment with domestic priorities.
With Western narratives dominating the energy transition and sustainability conversation, LDCs, SIDS, and emerging economies need to reconsider the underlying philosophy of their energy technology preferences. The Global North bases most of its innovation choices on scientific information, but often ignores traditional knowledge, indigenous perspectives, or collaborative approaches that also inform technology creation, adoption, and diffusion in the Global South. This leads to a bias in favor of fossil fuel technologies deemed as tried and tested, and views clean energy technologies in need of local design adaptation, likely to be considered riskier in their implementation.
With governments in the Global South in the driving seat, the opportunity to own the discussion and steer the energy transition conversation is clearly there. The space for joint innovation created by clean energy technologies that is both based in scientific information and local tradition is more likely to strengthen stakeholder engagement, increase domestic employment, and enhance local procurement.
The literature reviewed supports a narrative of co-benefits, not trade-offs, associated with radically decreasing greenhouse gas emissions, significantly improving socio-economic outcomes, and consequently strengthening the resilience of the Global South to climate shocks — all before Africa’s climate COP!