SPECIAL FEATURE
C limate change and energy are inextricably linked. Globally, the use of energy represents by far the largest source of greenhouse gas emissions from human activities. About two-thirds of global greenhouse gas emissions are linked to burning fossil fuels for energy used for heating, electricity, transport and industry. However, energy is also an indispensable driver of development. As economies grow, energy demand increases. If energy is constrained, growth pulls back in turn. For the past two centuries, the amounts of energy that economies need have increased virtually in lockstep with the amounts of wealth that economies create. As a study by McKinsey, a management consultancy, put it: “To a remarkable degree wealth creation has depended on a society’s proficiency at burning things”. Combating energy poverty in developing countries has always received special attention at the OPEC Fund for International Development since its inception in 1976 with the explicit mission to foster development in low- and middle-income countries around the world. The OPEC Fund’s new Climate Action Plan, approved by the Governing Board on September 15, 2022 represents the next logical step in fulfilling the organization’s mandate, one that ensures that development efforts create an even larger positive impact. The plan starts with a calculated increase of the OPEC Fund’s climate financing from currently 20 percent to 25 percent by 2025. Having reached this milestone the plan gathers momentum and provides for an increase to 40 percent by 2030, doubling the minimum rate of climate-specific financing. OPEC Fund Director-General Dr. Abdulhamid Alkhalifa called the adoption of the plan “a historical moment as it commits the OPEC Fund to dramatically increase its climate action.” Putting things into perspective, he added: “When the OPEC Fund set out its operations almost 50 years ago, energy poverty was one of the defining issues of our work. Securing energy access remains indispensable, but today it has to be combined with climate action.” What makes the Climate Action Plan
a significant venture for the OPEC Fund is not just the rate of financing, but starting in 2025 climate change will be specifically considered throughout the project cycle. In other words, climate impact will be measured not only in projects that are specifically targeted to address climate change, but in all projects submitted for approval. To understand how this will boost progress, it helps to look at the increasingly important role energy plays in developing the world of tomorrow.
Martin Kriegler, Systems Infrastructure Analyst “Healthy living and permanent motion are very important to me. I feel energized thanks to motion.”
Energy as a driver The importance of energy for
development was acknowledged by the United Nations, when the Sustainable Development Goals (SDGs) were defined: “Access to affordable, reliable, sustainable and modern energy” was selected as SDG 7. Despite accelerated progress in recent years, the SDG target of universal access by 2030 appears “unlikely to be met”, the World Bank said in June 2021. According to these estimates, more than 750 million people still live without electricity, with about half of them struggling in fragile and
When the OPEC Fund set out its operations almost 50 years ago, energy poverty was one of the defining issues of our work. Securing energy access remains indispensable, but today it has to be combined with climate action.
conflict-affected settings. A rapidly-growing global population is adding to the pressure. By mid-century the global population is expected to reach ten billion, mostly due to significant increases in
Dr. Abdulhamid Alkhalifa, OPEC Fund Director-General
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