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The energy transition requires deeper North/South collaboration

Advanced economies need to deepen their engagement with developing countries to overcome a new “North/South divide” on the pace and priorities of energy transition if the world is to make progress on reducing carbon emissions from the energy sector, according to a new report by the International Energy Forum in collaboration with S&P Global Commodity Insights.

The report entitled “Shaping a Living Roadmap for Energy Transition”, produced by the International Energy Forum with S&P Global Commodity Insights as chief knowledge partner, is an outcome of a series of dialogues held over the last 10 months in Cape Town, Bali, Riyadh, Washington DC, Panama City, and Davos, as well as roundtables held in conjunction with CERAWeek by S&P Global in Houston.

“Expectations of a linear global transition have been shaken as climate goals coexist with priorities around energy security, energy access, and affordability,” said Joseph McMonigle, Secretary General of the IEF.

“Instead, a “multidimensional” approach is required that is inclusive of different situations in different parts of the world, reflecting varied starting points, a diversity of policy approaches; and is equitable,” he added.

The report presents viewpoints expressed by 350 participants from industry, government, and civil society on the lessons from the recent energy crisis, which has had a profound impact on energy policies around the world. Hosted by Mr. McMonigle and Daniel Yergin, Vice Chairman of S&P Global, the dialogues revealed a growing consensus that expectations of a linear global transition of the energy system that adheres to a single net-zero path globally are not sufficient.

“Focusing on a singular pathway to achieving net zero emissions by 2050 could undermine achievement of other sustainable development objectives, constrain financing for critical energy projects and put at risk the necessary public support for climate policies,” the report said.

The recent crisis in global energy markets and high energy prices have contributed to inflation. At the same time, global greenhouse gas emissions have reached new highs as economics and shortages forced many countries to pivot back to coal-fired power generation. Growth in renewable power has accelerated but has so far failed to keep pace with growing power demand.

“A series of shocks, crises and tensions in the global energy system have rendered the energy transition more complex,” said Mr Yergin. “Transitioning a $100 trillion global economy in a quarter century is a big challenge.”

The report noted significant policy moves in developed markets, with hundreds of billions of dollars of new funding and incentives expected to cut emissions in the United States, Europe, Japan and China and drive research into new decarbonization technologies, as well as expanding market share for electric cars. At the same time, participants in the roundtables noted that progress was uneven around the world.

“The path to net-zero will have to travel via the Global South and therefore it is in everyone’s interest to collaborate and cooperate for the shared goals to achieve net-zero,” the report said.

Developing countries, which assert that they have little responsibility for the historical accumulation of CO2 in the atmosphere, are expected to drive growth in energy demand for the next 30 years, the report said.

Participants from the developing countries of the Global South argued that “depending on their access to energy resources both indigenous and imported, financing needs and geography, many of these countries need access to hydrocarbons to raise their standard of living before their emission trajectories change”.

There was much discussion in the roundtables about investment needs. Some roundtable participants observed that funding bans on areas of energy production raise the cost of energy, impede economic growth, and threaten to undermine public support for the transition when competitive alternative energy sources are not yet available.

About Gladys Johnson

Gladys Johnson The Publisher/Editor-In-Chief Global Business Drive Phone: +13465619347 Email: info@globalbusinessdrive.com gladysjohnsonmedia@gmail.com gladys@globalbusinessdrive.com globalbusinessdrive@gmail.com

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