The energy transition, a global revolution that is long overdue

“The world bet on fossil fuels and it lost. Antonio Guterres is never short of razor-sharp phrases. On June 17, once again, at a (virtual) summit of the world’s major economies on energy and climate, the UN Secretary-General urged the world to let go of polluting energies. Faced with the climate crisis, renewables are our lifeline, he insists. In passing, he warns… Be careful not to consider the war in Ukraine as an excuse to make us even more dependent.

With its Green Deal, Europe is displaying stronger than ever climate ambitions, in particular to qualify renewable energies. But, in the short term, the conflict triggered by Russia has met the best energy wills to the test. Governments have flip-flopped on their policies.

With the Russian gas tap closed, Germany, the Netherlands, and even Austria, which is aiming for 100% electricity from renewable sources by 2030, will have to use more coal to guarantee the safety of their electricity supply. France will probably be reduced momentarily, too, to burning more fossil fuel this winter, as will the United Kingdom.

Record CO2 emissions

In Brussels, concern has arisen. “We must ensure that we use this crisis to move forward, and not to go back on dirty fossil fuels”, urged the President of the European Commission, Ursula von der Leyen, in an interview with the “FinancialTimes”. NGOs fear that this activation of “wrong levers” will have a domino effect, says Neil Makaroff, Europe manager at the Climate Action Network. Germany’s even temporary return to coal could be seen as a “terrible signal” by some of Europe’s neighbours.

In the meantime, the United States too is looking for short-term solutions to soaring energy prices that are fueling inflation, and Joe Biden has resolved to support an increase in domestic fuel production.

On Tuesday, climate groups blamed G7 leaders meeting at the summit in Germany for watering down their pledges to halt fossil fuel investment internationally. The seven powers referred to “exceptional circumstances” and judged that “state-supported investments in the gas sector” [pouvaient] be appropriate as a temporary response”.

Globally, the energy transition is struggling. Despite the record amounts invested in renewables last year and an unprecedented increase in capacity and production, “the energy transition is not taking place”, informed REN21, an international network of experts from academia and science and industry, governments or NGOs, in its annual report released in mid-June.

In fact, the global demand for energy is such that this boom in renewables is not enough to meet it. Worse, it is largely fossil fuels that have satisfied her. As a result, CO emissions2 in the energy sector soared 6% to record highs.

Alarm signal

However, there is no real energy transition that is global. Drastically reducing the impact of energy production, distribution and consumption on the environment to stem global warming – what the energy transition is – cannot only be done at one end of the planet, without the other participating. Problem, apart from China, the rise of investments in renewables takes place, for the time being, above all in the developed economies.

The International Energy Agency (IEA) sees this as a real “warning signal”: global investment in coal supply increased by 10% last year, driven by emerging economies in Asia. And a similar rise is expected this year. There are some positive points, such as the development of solar in India. But spending on “clean” energy remains stuck at 2015 levels…since the Paris Climate Accord. As a result, the global share of renewables in energy consumption “stagnant” or almost since it fell from 8.7% in 2009 to 12.6% in 2020, according to REN21. So the rest goes to the fossils.

As for oil demand, the IEA estimates that it should exceed the pre-Covid pandemic level next year, happy in large part by the needs of China which more than offset the decline on the side of the OECD countries.

Oil on the fire

Fossil fuels also remain watered down by funding. After a very sharp decline in 2020, in the middle of the Covid year, last year subsidies to the sector made a strong comeback: governments poured in 440 billion dollars worldwide. So much oil on the fire of the climate crisis. However, the latest IPCC report says it clearly: infrastructure that uses coal, fuel oil and gas should be stopped prematurely by 2050, otherwise we will exceed a warming of 1.5°C.

Over the past year, state promises to switch to a carbon-free world have certainly multiplied. More than 130 countries have committed to “carbon neutrality” by the middle of the century, and even more have shown their desire to focus much more on renewables, efficiency and electric mobility.

But the transformations have yet to materialize. The current explosion in energy prices all over the globe could be a new accelerator. For a rapid transition, the UN chief called for tripling public and private investment in renewables and making renewable technologies a “global public good”.

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