Development of a clear climate framework and a global emissions target is essential if US$48 - 53 trillion for a new sustainable energy infrastructure is to be delivered, according to a new report from the World Energy Council.
The findings are uncovered in the fifth edition of the energy leaders dialogue series, the World Energy Trilemma Report, ‘Priority actions on climate change and how to balance the energy trilemma’, released by the World Energy Council and project partner Oliver Wyman, along with the Global Risk Centre of its parent Marsh & McLennan Companies, to government representatives as they meet for the sixth Clean Energy Ministerial (CEM6) in Merida, Mexico.
Drawing upon the insights of more than 2500 industry leaders and policymakers from across the globe, the report reveals the urgency with which energy sector leaders view the need for negotiators to agree on a climate framework and a global target for greenhouse gas emissions. Such a target, clearly defined and monitored, would enable the industry and finance sector to unlock investment and facilitate the transition to a sustainable energy future.
Joan MacNaughton, Executive Chair, World Energy Trilemma, commented: “The energy industry believes the time is ripe for stronger action on climate change, and it is more than ready to play its full part, building on the examples of leadership which some businesses are already showing.
“Our findings show that there is a real thirst for vigorous implementation of strong commitments, the focus now needs to move from negotiation to action. Unless this happens, it will become increasingly difficult to deliver across the three trilemma goals of energy security, energy equity and environmental sustainability.
“As the energy industry is telling us, it is now time to get something done.”
The report identifies five policy enablers which are key to the successful transition to a low carbon energy system:
- Remove barriers to trade and enable technology transfer, including tariffs on environmental goods and services, and protecting intellectual property rights.
- Set a carbon price to level the playing field and redirect investment towards low carbon solutions.
- Provide the right policy signals to scale up investment, accompanied by a portfolio of bankable projects to attract more private capital.
- Place greater emphasis on demand management including increasing energy efficiency across all sectors covering residential, commercial, industrial and transport.
- Prioritise and build platforms for innovation and RD&D, principally in the investment case for new technologies, as well as a new era of collaboration between the public and private sectors.
Christoph Frei, Secretary General of the World Energy Council, speaking ahead of the CEM6 meeting said: “It is increasingly clear that traditional mechanisms, known technology, policy and rates of innovation will not deliver the change needed to balance energy security concerns within countries and meet global climate targets. New and ambitious thinking is needed.
“This new thinking will require stable economic and policy platforms in order to boost investment and establish clear, consistent goals that guide the development of new energy infrastructure that will support the lower carbon transition.
“Energy leaders have identified five priority action areas. These actions must be accompanied by accelerated innovation in business models, processes and regulatory frameworks to accommodate new technologies, market design and a focus on resilience of energy infrastructure.”
The urgency with which a framework is required is evidenced by predictions around major changes in global energy demand, which is set to change dramatically in the period to 2050. As the economies of emerging countries such as Brazil, India, China and Southeast Asia grow, they will use more energy and their role in the negotiations as well as their commitments will be critical.
Asia is set to produce almost 50% of global economic growth by 2050, with its share of global total primary energy consumption rising between 45 and 48%. The Middle East and North Africa will continue to be heavy users of energy; their economies are set to triple by 2050, stimulating a doubling in energy demand during the same time. Despite European GDP doubling over that period, with improved energy efficiency across the continent, energy demand will remain largely unchanged.
François Austin, Global Head of Energy Practice, Oliver Wyman, commented: “Reducing policy uncertainty is essential. This will enable policy makers and business leaders in the energy and financial services sectors to work within a robust framework for making critical investment decisions. Clear outcomes from the Paris negotiations are critical to moving forward with innovative business models and market designs that reflect and support the new and changing dynamics of the energy sector.”
Alex Wittenberg, Oliver Wyman Partner and Executive Director, Marsh & McLennan Global Risk Center, noted: “Transitions in the energy sector and the evolution in energy supply and demand will have huge impacts across all economic sectors. Companies have new and evolving choices on how they source and use energy now and in the decades to come and policy clarity is essential to accelerate the pace of transition.”
Adapted from press release by Rosalie Starling
Read the article online at: https://www.hydrocarbonengineering.com/the-environment/28052015/ambitious-global-climate-framework-required-now-859/