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IPW: Risk to global sustainable energy goals, and Hong Kong raises bus fares

13 June 2023

In this week’s Infrastructure Policy Watch, investment and policy gaps limit global sustainable energy access, and Hong Kong raises bus fares as public transport use recovers.

IPW: Risk to global sustainable energy goals, and Hong Kong raises bus fares
Hong Kong has increased its bus fares as public transport use recovers. Image credit: Shutterstock

World risks missing sustainable energy targets

The world is not on course for meeting any of the energy targets under Sustainable Development Goal (SDG) 7, according to a new report.

SDG7 aims to achieve affordable, reliable, sustainable and modern energy for all by 2030.

However, the annual Energy Progress Report says that, despite some gains, the current rate of global progress is too slow.

The report is a collaboration between the International Renewable Energy Agency (IRENA), the International Energy Agency (IEA), the United Nations, the World Bank, and the World Health Organization (WHO).

The key findings include:

  • In 2021, 675 million people lacked access to electricity. More than 80% of them lived in Sub-Saharan Africa. At the current rate of progress, 660 million people still won’t have access to electricity in 2030.
  • Renewable energy deployment has risen significantly in the power sector. The share of renewable sources in total final energy consumption reached 19.1% globally in 2020, compared to 16.7% in 2010.
  • However, renewable energy deployment still needs to speed up considerably to meet SDG7 – particularly in heat and transport.
  • Progress in energy efficiency measures is also off track, with only a 0.6% rate of improvement in 2021.
  • International public financing to developing countries for clean energy projects fell for the third year running.

In 2021, the figure was US$10.8 billion – about 40% of the 2017 peak.

The report calls for stronger and more tangible policies to close gaps in access to electricity, energy efficiency and clean cooking.

It also says the global energy system requires a fundamental transformation and more international cooperation to ensure sustainable development and global energy security.

ICE’s view

The SDGs are a blueprint for achieving a better future.

They address global challenges, including poverty, inequality, climate change, environmental degradation, peace, and justice.

However, progress against the SDGs has slowed or even reversed in recent years.

The SDG progress index highlights “major challenges” in achieving one or more goals in most countries.

In the context of SDG7 and energy access, those trends could be reversed if governments act now.

Last year the IEA forecasted ‘unprecedented’ growth in renewable energy deployment over the next five years in response to energy security concerns.

However, it also said global renewable capacity could grow by an additional 25% if governments fixed current policy and financing challenges.

And recent analysis by IRENA showed how it can help for countries to use long-term energy scenarios to navigate policies through the complexities of global challenges.

Hong Kong raises bus fares as use recovers

The Hong Kong government has approved fare increases for the city-state’s five franchised bus operators.

The average increases across the services range from 3.9% to 7%.

The government highlighted the need to balance the impact of the Covid-19 pandemic and increased costs on operator returns while ensuring public acceptability and affordability.

It is therefore keeping the increase relatively low to minimise the impact on passengers.

It also noted the emerging ‘positive recovery outlook’ for operators post-pandemic.

The latest figures indicate a return towards pre-Covid-19 levels of public transport use in Hong Kong.

However, the government will continue to subsidise fares.

In 2019, Hong Kong introduced a non-means tested Public Transport Fare Subsidy Scheme to ease the cost of travel for passengers.

In its recent budget, the government extended the scheme until October 2023, at an additional cost of HK$1.08 billion.

ICE’s view

In Hong Kong, as in the UK, there are signs that public transport use is returning to pre-Covid-19 levels.

However, the impact of the pandemic and rising operating costs means that ensuring the long-term financial sustainability of public transport remains a challenge.

Well-run public transport services are key for achieving wider national goals such as net zero, economic growth and better social outcomes.

But to unlock those benefits, governments need to ensure services remain viable for operators, and affordable and attractive to the public.

This is why public transport has continued to be heavily subsidised by governments – including in Hong Kong, the UK and Singapore.

But high levels of subsidisation cannot continue indefinitely.

The ICE’s Next Steps Programme on funding public transport post-Covid-19  has explored the options policymakers could take to ensure a sustainable future funding model for public transport.

These include looking to new funding models, such as road pricing and land value capture.

In case you missed it:

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  • David McNaught, policy manager at ICE