The moment of truth for global energy transition is here

energy

(Federico Beccari, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Roberto Bocca, Head of Shaping the Future of Energy & Materials, Member of the Exec Committee, World Economic Forum & Harsh Vijay Singh, Project Lead, System Initiative on Shaping the Future of Energy, World Economic Forum Geneva


  • This year’s ETI shows slow but sure progress, with more than 80% of the countries increasing their score on the index since 2015.
  • The COVID-19 crisis has put a spotlight on vulnerabilities as the global energy system has been destabilized.
  • There is an opportunity to build more resilience into the system so that it can weather a future that is likely to be turbulent.

The black swan of 2020

The year 2020 was supposed to be a turning point in the global energy transition. The production and consumption of energy accounts for two-thirds of annual global anthropogenic emissions, making the energy transition central to delivering the promise of the Paris Agreement.

 

Countries were expected to take stock of their Nationally Determined Contributions to meeting the Paris Agreement’s goals and potentially strengthen their commitments to keeping global temperature increases to well below 2 degrees, with the ambition of reducing this figure to no more than 1.5 degrees. The year 2020 arrived with a sense of gathering momentum as the world entered its decade of delivery.

But over the course of the past few months, we have been up against a low-probability, high-impact catastrophe of global proportions. The speed, scale and intensity of the COVID-19 pandemic caught us off guard, necessitating the reallocation of resources and a collective conviction towards limiting the extent of the damage, and restoring normalcy to the economy and to society as soon as possible.

COVID-19 has proven to be a “black swan” event, threatening to undo the gains from the longest period of economic expansion in history.

A vulnerable energy system

The disruptions from COVID-19 have exposed vulnerabilities in the energy system. The short-term outlook for the energy transition is therefore at risk. The unprecedented speed and extent of the drop in energy demand, and the accompanying price volatilities and geopolitical implications have destabilized the global energy system.

The economic dimensions of energy transition mean that extreme price volatility has fiscal implications for countries and impacts the livelihoods of millions of energy sector workers. It also alters the competitiveness of renewable energy technologies and reduces incentives for energy efficiency. Resilience – not just in markets and infrastructure, but also in policy and cooperation mechanisms – will be critical for an accelerated recovery in energy transition.

There are signs of revival, as energy demand seems to be gradually picking up. However, it might be longer before the economy reclaims the lost ground. Given the uncertain economic outlook, purchase of automobiles and domestic appliances might be postponed, infrastructure development could be paused and non-essential industrial activities might take longer to restart.

What’s the World Economic Forum doing about the transition to clean energy?

Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.

Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.

Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.

Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.

To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions.

Is your organisation interested in working with the World Economic Forum? Find out more here.

The new normal is increasingly turbulent

This decline in energy consumption has an immediate effect on the environment, as skies have cleared in even the most polluted areas of China and India. While this may be a blessing in disguise for the environmental sustainability agenda, it should not be mistaken for progress, and also demonstrates the cost we need to pay for an effective energy transition.

G20 countries’ Energy Transition Index 2020 ranking and share of global total energy supply, 2017
G20 countries’ Energy Transition Index 2020 ranking and share of global total energy supply, 2017
Image: World Economic Forum and IEA, World Energy Balances 2019

Along with a sustainable and thriving ecosystem for future generations, an effective energy transition is also essential for economic growth and social development. In an increasingly turbulent global paradigm, disruptions are the new normal, and energy transition roadmaps need to integrate robustness against these disruptions. Resilience of energy transition, in the long-term, implies a strong enabling environment that sees the system bouncing back from unforeseen or exogenous disruptions. This includes the presence of strong political commitment, stable capital markets and access to investment, a steady pipeline of innovations, modernization of infrastructure, training human capital for future energy systems, etc.

The World Economic Forum’s Energy Transition Index (ETI) benchmarks countries on these fundamentals for energy transition, along with the performance of their energy system on economic growth, environmental sustainability, and energy access and security. From the recently completed analysis for this year’s index, the evidence of gradual progress on energy transition is strong.

Since 2015, more than 80% of the countries have increased their score on the ETI. Encouragingly, the gap between emerging economies and the leading countries seems to be narrowing, but much work remains to be done.

Only a handful of countries have been able to make steady annual progress on the ETI over the past six years, which demonstrates the complexity and challenges of energy transition. Improving levels of regulations and political commitment, capital and investment, and technology development have been critical to unlocking this progress globally.

When we finally manage to put the global tragedy of COVID-19 behind us, there may be some valuable lessons learned. The energy transition challenge is similar to the pandemic in terms of scale, cascading effects across social and economic systems, more severe for vulnerable populations, and the necessity of a decisive, timely and concerted response. Stakeholders need to be conscious that the fight against COVID-19 does not set us back in solving the critical socio-economic puzzle of global energy transition, otherwise the losses resulting from the virus will take an even greater toll on humanity.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Emotional control and introspectivity in times of pandemic

New UN finance panel to push Global Goals forward

These are America’s most dangerous jobs

Financial Transaction Tax: More money for future bank bailouts?

Pandemic: another look at the self

An analysis of the impacts of climate change on human health

Commission tries to solidify the EU statistical system

Pakistan: a long road ahead

Commission reports on the risks of investor citizenship and residence schemes in the EU and outlines steps to address them

Gynecologic care in the 21st century

A Brussels antithesis reveals where the EU is heading

What’s the difference between carbon negative and carbon neutral?

Climate Change and Human Health: Two Faces of The Same Coin

EU budget agreement rejected by the European Parliament

The Mental Health Hero in You

Inclusion and diversity isn’t just good for employees – it’s good for the bottom line

The challenges of mental health among the Syrian medical students

Women’s rights face global pushback from conservativism, fundamentalism – UN experts warn

What we need for a better European Solidarity Corps

Why EU’s working and unemployed millions remain uncertain or even desperate about their future

COP24: Paris agreement remained alive but fragile while the EU attempts to slow down CO2 emissions for new cars

Responding to the anger

Yemen war ‘a test of our humanity’, and we’re ‘badly failing’ warns UN Children’s Fund chief

Paris, Rome, Brussels and Frankfurt to confront Berlin over growth and the Athens enigma

One migrant child reported dead or missing every day, UN calls for more protection

Lithuania vs Parliament over 2014 EU budget

Global warming: our responsibility

Antibiotics are contaminating the world’s rivers

7 shocking statistics that show the cost of corruption

Parmesan cheese on shelves in Italy (Copyright: European Union, 2014 / Source: EC - Audiovisual Service / Photo: Daniela Giusti)

CETA at risk again: Italy says it won’t ratify EU-Canada trade deal over product protection fears

Why our future relies on more inclusive and transparent innovation

In a time of rising xenophobia, more important than ever to ratify Genocide Convention

How to make primary healthcare a favourable career choice for medical students: strategies and reflections

The next EU President will first have to drink his tea at Downing Street

“The Belt and Road Initiative should be mutually beneficial for EU and China and every participating country”, Vice-President Papadimoulis of the European Parliament underscores from European Business Summit 2018

European Citizens’ Initiative: Commission registers ‘Mandatory food labelling Non-Vegetarian / Vegetarian / Vegan’ initiative’

Airships, solar planes and Soviet-era sea skimmers … here’s how we fix air travel

EU budget 2021: An annual budget focused on European recovery

How drones can help rural Africa take flight

Shifting Tides: Policy Challenges and Opportunities for the G-20

UN chief welcomes DR Congo President’s promise to stand down

Sustainable finance: Commission publishes guidelines to improve how firms report climate-related information and welcomes three new important reports on climate finance by leading experts

Young people demand a transparent job market: new campaign launches on international interns day

“Financial crisis will not happen in China!”, the Chinese Premier underlines from Switzerland; the Sting reports live from World Economic Forum 2015 in Davos

EU: All economic indicators in free fall

We can meet the SDGs using the wisdom of crowds. Here’s how

Refugees in Greece: MEPs demand solidarity, warn about impact of health crisis

WHO reports ‘very strong progress’ in battling DR Congo Ebola outbreak

“Who do I call if I want to call Europe?” Finally a name and a number to answer Henry Kissinger’s question

Science leads the response to COVID-19. These 25 scientists are tackling the other global challenges

New UN forestry project bids to help countries meet climate change commitments

South Africa’s cabinet is now 50% women for the first time ever

Your smartphone may know more about your mental health than you

Are Halloween pumpkins a problem for the planet?

Is Universal Health Coverage really available for all in the European Union?

UN-backed intercultural dialogue forum urged to keep working to ‘bridge gap between the like-minded’

Member States and Commission to work together to boost artificial intelligence “made in Europe”

Family incomes stagnate in the EU; people excluded from ‘moderate recovery’

Parliament commemorates the victims of the Holocaust

Somalis ‘will not be deterred’ by Friday’s terror attacks – UN chief

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s