Fostering Effective Energy Transition 2022 | 21 May 2022

Why in News?

Recently, the World Economic Forum (WEF) has released a report named Fostering Effective Energy Transition 2022, which calls for urgent action by both private and public sectors to ensure a resilient energy transition to address the challenges to environmental sustainability, energy security and energy justice and affordability.

What are the Findings of the Report?

• The energy transition is not keeping pace with the growing climate urgency, and recent compounded disruptions from a post-pandemic surge in energy demand, fuel supply bottlenecks, inflationary pressures and reconfigured energy supply chains as a result of the war in Ukraine have made the transition even more difficult.
• High energy prices, risks of energy supply shortages, and soaring demand for fossil fuels are simultaneously challenging energy affordability, energy security and access, and sustainability.
• The lack of access to an affordable energy supply has emerged as a key threat to a just transition.
• Industrial activity generates more than 30% of anthropogenic emissions, yet many industries face considerable challenges to decarbonize.
• Skewed Fuel Imports: Of the 34 countries with advanced economies, 11 rely on only three trade partners for over 70 % of their fuel imports.

What are the Recommendations?

• Climate Commitments and Long-Term Visions:
  • More countries need to make binding climate commitments, create long-term visions for domestic and regional energy systems, attract private sector investors for decarbonisation projects and help consumers and the workforce adjust.
• Holistic Approach on Transition Imperatives:
  • It is crucial to develop adequate enablers and support mechanisms to keep the momentum of the transition through this turbulent phase.
  • What is needed now, more than ever, is a holistic approach that delivers concurrently on the three transition imperatives – energy affordability, availability, and sustainability – at an accelerated pace.
• Incentivize Efficient Consumption and Behavioral Intervention:
  • Actions are necessary to protect those most vulnerable through appropriate support measures, in a way that incentivizes efficient consumption.
  • Behavioral interventions and fourth industrial revolution technologies can help households and businesses alike.
• Energy Diversity and Security:
  • Dual diversification (of supply source and supply mix) is key to strengthening countries’ energy security.
  • Diversifying the ecosystem of import partners in the short-term and diversifying the portfolio of domestic energy with low-carbon alternatives in the long-term can yield significant benefits.
• Supply-side Interventions and Demand-Side Efficiencies:
  • Supply-side interventions will need to be augmented with demand-side efficiencies.
  • Current energy market volatility and security constraints provide an opportunity to supercharge the transition by boosting demand for clean energy and fostering more efficient energy consumption from both industrial and end consumers.
• Regulatory frameworks:
  • Regulatory frameworks need to be strengthened to drive the necessary actions and investments.
  • Anchoring climate commitments into legally binding frameworks would not only ensure that those commitments endure political cycles, but also provide enforcement mechanisms to keep the long-term implementation efforts on track.
• Clean Demand:
  • Clean demand signals could be the necessary turning point to scale the projects and investments required for the development of low-emission industries.

Source: BS