Unprecedented disruptions from the coronavirus pandemic risks cancelling out recent progress unless there is urgent action at national, regional and global levels.
The coronavirus pandemic risks cancelling out recent progress in countries transitioning to clean energy without urgent stakeholder action, a new study from the World Economic Forum (WEF) warns.
WEF’s study measures readiness for clean energy transition in 115 economies showing that 94 have made progress since 2015, but reveals environmental sustainability continues to lag. With unprecedented falls in demand, price volatility and pressure to quickly mitigate socioeconomic costs, it places the “near-term trajectory” of the transition in doubt.
As a result, policies, roadmaps and governance frameworks for energy transition at national, regional, and global levels need to be more robust and resilient against external shocks, cautions the Fostering Effective Energy Transition 2020 report.
“The coronavirus pandemic offers an opportunity to consider unorthodox intervention in the energy markets and global collaboration to support a recovery that accelerates the energy transition once the acute crisis subsides,” said Roberto Bocca, head of energy and materials, World Economic Forum.
“This giant reset grants us the option to launch aggressive, forward-thinking and long-term strategies leading to a diversified, secure and reliable energy system that will ultimately support the future growth of the world economy in a sustainable and equitable way.”
The report draws on insights from Energy Transition Index (ETI) 2020, which benchmarks 115 economies on the current performance of their energy systems – across economic development and growth, environmental sustainability, and energy security and access indicators – and their readiness for transition to secure, sustainable, affordable, and inclusive energy systems.
“The coronavirus pandemic offers an opportunity to consider unorthodox intervention in the energy markets and global collaboration to support a recovery that accelerates the energy transition once the acute crisis subsides.”
The results for 2020 show that three-quarters of countries have improved their environmental sustainability, even as the global average score for this dimension remains the lowest of the three categories assessed.
WEF notes this progress is a result of multifaceted, incremental approaches, including pricing carbon, retiring coal plants ahead of schedule and redesigning electricity markets to integrate renewable energy sources.
Sweden (1) leads the ETI for the third consecutive year, followed by Switzerland (2) and Finland (3). France (8) and UK (7) are the only G20 countries in the top 10. They share common attributes, such as limiting energy subsidies, reducing reliance on imports (thereby improving energy security), achieving gains in energy intensity of GDP, and increasing political commitments to pursue ambitious energy transition and climate change targets.
In China’s case, problems of air pollution have resulted in policies to control emissions, electrify vehicles, and develop the world’s largest capacity for solar PV and onshore wind power plants.
Performance is mixed among the rest of the G20. Emerging centres of demand such as India (74) and China (78) have made consistent efforts to improve the enabling environment, which refers to political commitments, consumer engagement and investment, innovation and infrastructure, among others.
In China’s case, WEF reports, problems of air pollution have resulted in policies to control emissions, electrify vehicles, and develop the world’s largest capacity for solar PV and onshore wind power plants. While for India, gains have come from a government-mandated renewable energy expansion programme.
Meanwhile, the trend has been “moderately positive” in Germany (20), Japan (22) and South Korea (48) and Russia (80). Germany has demonstrated strong commitment in coal phase-out and decarbonisation of industry through clean hydrogen, however affordability of energy services has been a challenge.
Both Japan and Korea face natural disadvantages as net energy importers. However, innovative business environment, infrastructure development, and political commitment remain key enablers in both countries.
While the gaps between what is required, what is committed, and what is likely to be achieved remain large, the compounded disruptions from Covid-19 have destabilised the global energy system with potential short-term setbacks.
Ultimately, WEF warns that greater efforts are needed to ensure that recent momentum is not just preserved but accelerated in order to achieve the ambitious goals required.
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