The global power sector's low-carbon transition may enhance sustainable development goal achievement

The global power sector, heavily reliant on fossil fuels, contributes nearly 40% of energy-related CO2 emissions. A low-carbon transition is vital for climate change mitigation and energy security. However, this transition's impacts extend far beyond climate concerns, affecting resource use, environmental emissions, and employment, among other factors related to the Sustainable Development Goals (SDGs). The transition might alleviate some issues while exacerbating others; for instance, closing coal plants reduces water withdrawal (beneficial for SDG 6) but causes job losses (negative for SDG 8). Similarly, renewable energy expansion addresses climate change (SDG 13) but increases demand for critical materials (hindering SDG 12). This complex interplay necessitates a comprehensive understanding of the transition's impact on global SDG progress. Previous studies have examined specific national or regional transitions focusing on single aspects like employment, economic growth, resource use, or emissions. This study addresses the gap by analyzing the multifaceted impacts of the power transition on SDG achievement, considering both direct effects and interregional trade consequences. The research uses an integrated assessment framework coupling the Global Change Assessment Model (GCAM), multiregional input-output (MRIO) analysis, and the UN SDG approach to examine direct and supply chain effects of power transitions on regional and global SDGs by 2100.

Existing research predominantly focuses on isolated impacts of specific national or regional power sector transitions. Studies have analyzed effects on regional employment, economic growth, natural resource use, and greenhouse gas emissions. However, a comprehensive assessment integrating multiple SDG dimensions and interregional trade effects remains largely unexplored. For example, some research has shown that developing Asia's coal power plans often neglect water resource implications, potentially exacerbating water shortages. Furthermore, the impact of a power transition in one region extends beyond its borders through international trade. Renewable energy expansion or fossil fuel reduction in one country may alter pollution levels, resource consumption, and employment in global supply chains, impacting other regions' SDG progress. Initial investigations suggest that European renewable energy directives could negatively affect forests in tropical countries through wood trade.

This study employs an integrated assessment framework combining three modules: a base module, a scenario module, and an SDG simulation module. The base module utilizes the EXIOBASE MRIO model to analyze the environmental and socioeconomic impacts of ten power production subsectors (coal, gas, nuclear, hydro, wind, petroleum, biomass, solar PV, solar thermal, and geothermal). The model captures direct and supply chain effects on indicators relevant to SDGs, including CO2, SOx, NOx, PM emissions, water use, material use, employment, value-added, taxes, and wages. The scenario module employs the GCAM to simulate global power transition pathways under different scenarios, combining Shared Socioeconomic Pathways (SSPs) with Representative Concentration Pathways (RCPs). Three SSPs (SSP1, SSP2, and SSP5) and three RCPs (RCP2.6, RCP4.5, and RCP6.0) are considered, representing varying levels of socioeconomic development and climate mitigation ambition. The GCAM provides future power generation by region and technology, along with key parameters for the MRIO model (e.g., CO2 emissions per unit of electricity). The SDG simulation module translates changes in environmental and socioeconomic indicators into SDG progress using the UN SDG approach. Indicators are normalized to a 0-100 scale, and an SDG index score is calculated as the arithmetic mean of individual target scores. The study accounts for changes in the direct impact per unit of electricity generated and uses these, along with the outputs of the GCAM, to model the change in environmental and socioeconomic impacts over time.

The study's scenario analysis reveals that the global power transition significantly impacts environmental and socioeconomic factors. Under RCP2.6 scenarios, CO2 emissions decrease substantially (31-32%), exceeding reductions under RCP6.0 and RCP4.5. NOx, SOx, and PM emissions also decrease under all scenarios. Blue water consumption increases under SSP5 and SSP2 scenarios but decreases under SSP1. Material use (biomass, metals, nonmetals) increases under all scenarios, but fossil fuel use decreases. Employment, value-added, wages, and taxes increase across all scenarios, with RCP2.6 scenarios showing greater job creation due to renewable energy expansion. The global SDG index score increases under all scenarios, with the most significant improvement (11%) observed under RCP2.6 scenarios. However, the short-term impact is less pronounced, and some SSP5 scenarios even show a slight decrease. Progress toward SDG 7.2 (renewable energy share) significantly increases, while progress on SDG 9.4 (sustainable industrialization) and SDG 13.2 (climate change integration) might stagnate in the short term due to ongoing fossil fuel use. Regional variations in SDG index scores are substantial. Developed economies generally show improvement, while developing economies exhibit lower improvement or even declines under certain scenarios (like SSP5+RCP6.0). The transition can improve SDG scores in fossil fuel-dependent economies like Estonia (through rapid renewable expansion), but conversely, it may negatively impact countries like Indonesia and Brazil due to continued fossil fuel reliance and hindered climate-related SDG progress. Analyses of regional individual SDG scores reveal both synergies and trade-offs between different SDGs. For instance, in some countries, while the overall SDG index score improves, some resource-related SDGs might show decreases. International trade related to the power transition has a limited global impact on average SDG performance, but it significantly affects individual countries. Developing economies with abundant fossil fuels and materials may experience declines in material use and environmental emissions-related SDGs due to increased resource consumption and emissions embodied in international trade. Sensitivity analysis confirmed the robustness of findings to the choice of normalization bounds.

This study quantifies the complex interactions between the power sector transition and SDG achievement. The findings highlight the potential for considerable global SDG improvement through a rapid low-carbon transition (RCP2.6 scenarios), but with significant regional disparities. The success hinges on developing economies' transition strategies, as continued reliance on fossil fuels threatens global progress. The study reveals both synergies and trade-offs in SDG progress, providing valuable insights for policymaking. Specific policy efforts are needed in developing economies to address financial constraints, promote renewable energy technology transfer, and support sustainable resource management. The findings emphasize the importance of considering the full impact of power transition strategies on various SDGs, as some regions might experience trade-offs even while seeing improvement in the overall index score. Furthermore, international trade plays a crucial role, potentially exacerbating existing inequalities in SDG progress unless carefully managed.

This research demonstrates the significant potential of a low-carbon power transition to enhance overall global SDG performance, yet highlights the substantial regional disparities in its impact. A rapid transition under RCP2.6 scenarios is associated with substantial co-benefits, while slower transitions lead to diminished gains. The findings emphasize the critical need for targeted policies in developing economies to facilitate a just and equitable transition that avoids exacerbating existing inequalities in SDG progress. Future research should expand the model's scope, explore a wider range of scenarios, and delve deeper into the complexities of international trade and its impact on regional sustainable development.

The study's limitations include the model's scope and data availability. While the EXIOBASE MRIO model and GCAM are comprehensive, they do not cover all aspects of sustainable development (e.g., biodiversity, human health). The nine scenarios used are illustrative, not exhaustive. Furthermore, the study assumes static global trade patterns to isolate the effects of the power transition, a simplification that might not fully reflect real-world dynamics. Future work should address these limitations by expanding the model's scope, incorporating a wider array of scenarios, and analyzing the dynamic evolution of global supply chains in response to low-carbon transitions.