Why in the news?
The World Economic Forum (WEF) recently released a report titled Fostering Effective Energy Transition 2022, which calls for immediate action by both the private and public sectors to ensure a resilient energy transition in order to address the challenges of environmental sustainability, energy security, energy justice, and affordability.
What are the Report’s Findings?
- The energy transition is falling behind the growing urgency of climate change, 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 Ukraine war have made the transition even more difficult.
- High energy prices, the threat of energy supply shortages, and rising demand for fossil fuels all pose challenges to energy affordability, security and access, and sustainability.
- The inability to obtain affordable energy has emerged as a major obstacle to a just transition.
- Despite the fact that industrial activity accounts for more than 30% of anthropogenic emissions, many companies confront significant obstacles in decarbonizing.
Of the 34 advanced economies, 11 rely on only three trading partners for more than 70% of their fuel imports.
What are the suggestions?
Long-Term Visions and Climate Commitments:
More countries must adopt legally binding climate commitments, develop long-term strategies for domestic and regional energy systems, attract private sector investors for decarbonisation projects, and assist consumers and workers in adapting.
A Comprehensive Approach to Transition Imperatives:
- It is critical to create appropriate enablers and support mechanisms to keep the transformation moving forward during this challenging period.
- What is required now, more than ever, is a comprehensive solution that simultaneously addresses the three transition imperatives — energy affordability, availability, and sustainability – at a rapid speed.
Incentivize Efficient Consumption and Behavioral Intervention:
- Actions are required to safeguard people who are most vulnerable by providing appropriate support in a way that encourages efficient consumption.
- Behavioral therapies and fourth-generation technologies can benefit both households and enterprises.
- Energy Diversification and Security: Dual diversification (of supply source and supply mix) is critical to a country’s energy security.
- Diversifying the import partner ecosystem in the short term and diversifying the domestic energy portfolio with low-carbon options in the long term can offer major benefits.
Supply-Side Interventions and Demand-Side Efficiencies:
- Demand-side efficiencies will be required to supplement supply-side interventions.
- The current energy market volatility and security restrictions present an opportunity to accelerate the transition by increasing demand for renewable energy and encouraging more efficient energy consumption from both industrial and end users.
Regulatory frameworks must be enhanced in order to motivate the necessary actions and investments.
Anchoring climate promises in legally binding frameworks would not only ensure that they survive political cycles, but would also provide enforcement mechanisms to keep long-term implementation efforts on track.
Clean demand signals could be the tipping point needed to scale the projects and investments needed to build low-emission businesses.
What exactly is the World Economic Forum?
- The World Economic Forum (WEF) is a Swiss nonprofit foundation founded in 1971 and headquartered in Geneva, Switzerland.
- The Swiss authorities recognise it as the international institution for public-private partnership.
- Mission: Committed to bettering the world by bringing together commercial, governmental, academic, and other societal leaders to create global, regional, and industry agendas.
- Klaus Schwab is the company’s founder and executive chairman.
WEF has issued several key reports, including:
- Index of Energy Transition
- Report on Global Competitiveness.
- Global Information Technology Report
- This report is published by the WEF, INSEAD, and Cornell University.
- Report on the Global Gender Gap
- Report on Global Risks.
- Report on Global Travel and Tourism