Policy Analysis

RE-ARCTIC: Promoting renewable energy, eliminating fossil fuel subsidies and benefitting communities in the North

By Ivetta Gerasimchuk, Richard Bridle on December 29, 2014

The International Institute for Sustainable Development (IISD) presented its vision of renewable energy development to the Sustainable Development Working Group of the Arctic Council in Whitehorse on March 1, 2015.

Renewable sources seem to be a straightforward way to provide “sustainable energy for all” in the Arctic. The Arctic has vast reserves of renewable energy, including hydro-, bio-, wind and geothermal power. Renewable energy technologies have been successfully tested and put in operation in the Arctic. Large-scale hydropower accounts for up to 75 per cent of electricity in Greenland and a significant share of electricity supply in northern Norway, Russia, Iceland and some other parts of the Arctic.

Small-scale renewable energy technologies and off-grid solutions for remote communities have also been successfully applied in the Arctic. There are striking similarities and synergies in terms of renewable energy solutions for small remote communities in the Arctic and in small island and archipelago states, in some of which (for instance, the Philippines or Cape Verde) renewable energy accounts for 25 to 30 per cent of electricity generation, with successful off-grid installations.

Yet, despite this evidence in favour of renewable energy development in the Arctic, the uptake of renewable energy in the region has been slow. The work that IISD has undertaken on successful policies for deployment of renewables around the world suggests several lessons learned that may be highly relevant for the Arctic:

  • Clear long-term targets and policies supporting renewables are essential to ensure investors’ decisions.

  • Phase-out of subsidies to fossil fuels (such as highly subsidized diesel in the Arctic), is essential to promote renewable energy. Subsidies to fossil fuels distort the playing field for renewable energy that can be cost-competitive in remote communities if there are no such distortions.

  • Public–private partnerships are essential; dedicated funds to support renewable energy development can be accumulated in a number of ways, including through environmental taxes (carbon tax, taxes on pollution, etc.).

Market integration on both the supply and demand sides is important to bring down the costs of renewable energy, which requires cooperation and synergies across different jurisdictions in the Arctic.

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