Progress over the past decade toward a global renewables-powered energy system is set to accelerate rapidly in the coming decades with eight of the world’s ten largest economies now pledging net zero emissions by 2050, the World Economic Forum (WEF) has concluded in its annual Energy Transition Index (ETI).
But WEF’s yearly score-card – which cross-calculates economic development, environmental sustainability and energy security to determine how far nations have shifted away from fossil fuel-driven economy – also showed only 10% of countries having made “steady and consistent” gains since 2011 in the three key indicators.
“As we enter into the decade of action and delivery on climate change, the focus must also encompass speed and resilience of the transition,” said Roberto Bocca, WEF’s head of energy and materials.
“With the energy transition moving beyond the low hanging fruit, sustained incremental progress will be more challenging due to the evolving landscape of risks to the energy transition.”
The 2021 ETI show that 92 out of 115 countries tracked improved increased their aggregate score over the past 10 years, affirms the “positive direction and steady momentum of the global energy transition”, with “strong” gains in environmental sustainability and energy access and security, and increasing penetration of renewable energy plant having “particular helped energy importing countries achieve simultaneous gains” in the two areas.
That only one-tenth of national ETIs saw stable improvements through the last decade, the WEF attributes to the “inherent complexity” of the energy transition, “as evidenced by the lack of measurable progress in the economic development and growth dimension – primarily through fiscal implications, labour market dislocations, and affordability challenges resulting from the energy transition”.
Muqsit Ashraf, senior managing director at Accenture, which collaborated with the WEF on the report, Fostering Effective Energy Transition 2021, said: “A resilient and just energy transition that delivers sustainable, timely results will require systemwide transformation, including reimagining how we live and work, power our economies and produce and consume materials.
“This in turn will require strong collaboration between policy makers, business leaders, energy consumers, and innovators. The journey to achieving such a balanced transition has been slow and daunting, but it is picking up momentum and offering countries and companies many opportunities for long-term growth and prosperity.”
The report, which this year used an adapted methodology to factor in the “increasing urgency of climate change action”, makes three recommendations to world leaders to “enhance the resilience” of the energy transition:
· prioritise measures to support the economy, workforces and society to ensure a just transition;
· accelerated electrification “while exploring other options” for decarbonising industries;
· and leverage a diversified, resilient range of capital from public and private sectors to fund multi-year and multi-decade investments.
Topping the ETI list, all with “low levels of fossil fuel subsidies, enhanced energy security and a strong regulatory environment” to drive the energy transition, were Sweden, Norway and Denmark, with the UK, in seventh, France, ninth, and Germany, 18th, the only G20 countries inside the top 20.
The US, at number 24, showed “improvement on all three dimensions of the energy triangle”, noted the WEF report, while China, in 68th, and India, 87th – which together account for one third of global energy demand – both made “strong improvements” over the past decade, despite coal continuing to play a cornerstone role in the former’s energy mix, due to “large reductions in the energy intensity of the economy, gains in decarbonising the energy mix through the expansion of renewables and strengthening the enabling environment through investments and infrastructure”.