Dubai, UAE — Building massive infrastructure for clean power projects in pursuit of climate goals will need nearly $4.5 trillion in investments by 2030, but more importantly, it will need a “people-positive” approach, experts have said.
The people-positive approach has yet to acquire an industry definition. But experts and clean energy leaders cited in a World Economic Forum (WEF) white paper entitled “Using a People-positive Approach to Accelerate the Scale-up of Clean Power”, however, broadly spell out what such an approach would entail.
Energy transition always involves community and the engagement with the community has hitherto rested on three pillars — understanding and respecting the local context; engaging early, continuously, meaningfully and transparently, and defining a clear plan focused on delivering shared value.
While these building blocks are important for successful engagement, the white paper says, they are no longer enough.
Achieving the necessary speed and scale in the energy transition in a responsible way would now include prioritizing system value impact within the business strategy; leveraging cross-sectoral collaboration moving towards a partnership approach with communities and working with other industry leaders to develop a framework for measuring people-positive impact.
Mads Nipper, Chief Executive Officer of Denmark’s Ørsted, “We believe that for energy projects to be people positive, the industry should explore how to effectively prioritize local upskilling and job creation, how to meaningfully engage with people living close to new sites, and how to best ensure people from marginalized groups have equitable access to the opportunities and shared benefits of clean energy.”
Massive land impact and opposition
Such broad-based engagement is vital because expanding clean power capacity will require significantly large areas of land and water. Estimates range from 2-3 percent of the European Union and the US and up to 5 percent for Japan and South Korea
“Finding project sites that do not impact people will become increasingly difficult. In addition, the accelerating pace of deployment increases both the frequency and magnitude of that impact,” the paper reads.
A 2020 study, analyzing nearly 300 cases of opposition to clean power projects across 23 countries from 1997 to 2019, showed that 10 percent of projects got canceled, 21 percent were suspended and of the remaining, 50 percent were delayed.
Opposition usually stems from social, economic and environmental impact, and the impact due to institutional uncertainty besides the natural tendency to resist change.
Such hiccups not only slow down the energy transition but also impact business performance due to revenue loss and higher operating costs. Lengthy legal battles can not only affect businesses’ ability to operate safely and profitably but even cause damage to brand equity and reputation, the white paper said.
Three pillars of successful community engagement
The white paper lays down three pillars for successful community engagement.
First, understanding and respecting the local context, as
projects can encounter both strong advocates and fierce opposition because stakeholders perceive the benefits and impacts differently.
Second, early, continuous, meaningful and transparent community engagement requires engagement to occur throughout the project life cycle from early development to decommissioning.
Finally, establishing an inclusive and transparent framework to collect and evaluate input, make decisions and share feedback is useful.
Besides the above pillars, the white paper calls upon business leaders to embed system value impact into the company strategy, embracing it as a core value to lead by example.
It also recommends leveraging cross-sectoral collaboration to move towards a partnership approach with communities
Businesses have a role in providing concrete implementation models for policy to have the desired effect and lean on policy-makers to help guide “what good looks like” for their respective local, regional or national contexts,” it said.
“Policy mechanisms such as the non-price criteria in renewable energy auctions and industry guidelines, even if not legally binding, can help guide business decisions on developing projects with a positive impact on people,” the paper adds.
Conversely, businesses can go beyond the statutory requirements and draw on their own best practices to “create system value for all stakeholders in regions with weak institutions and/or regulatory frameworks”.
It also calls for working with other industry leaders to develop a framework for measuring people-positive impact. Also needed is a dialogue between the industry and community groups and NGOs to define common standards for a people-positive energy transition.
The white paper urges governments to not only focus on the lowest price but also the wider societal value creation in their transition plans.