Energy transition is a critical issue that requires close international cooperation. There is no doubt that energy systems are set to evolve on a global scale to prevent detrimental climate consequences. Yet, it is often neglected that energy transition can have vastly different definitions and comes with different sets of constraints and challenges for countries worldwide.
When debating who bears more responsibility in curbing carbon emission, emerging economies are often portrayed as uncooperative partners that lack commitment in their environmental agendas. However, a closer look highlights that the high carbon emission in some developing countries can be attributable to the goods and services they export to the developed world. For example, even though the UK greenhouse gas emission fell by 27% between 1990 and 2008, its ‘consumption-base’ emissions increased by 20% due to import goods. Simply put, the switch in emissions in some specific sectors is simply a manifestation of carbon intensive industries being moved to regions with a comparative economic advantage, namely the ability to provide cheaper labour and reduce the overall production cost. Not to mention, the developed world would not have achieved its current development stage without substantial carbon-intensive economic activities in the past.
That is not to say that developed countries do not face challenges in pursuing sustainable development pathways but to highlight that energy transition’s key barriers are different for countries worldwide. Various considerations and approaches need to be adopted when thinking about energy development globally. Local contexts such as resource endowment and stage of economic development are just some of the critical considerations that need to be acknowledged when thinking about energy transition in a different region. There is no one size fit all solution when it comes to complex issues such as energy.
For many countries in the developed world, the transition is about fuel substitution, and its pace is strongly correlated to government commitments and corporate strategies. Ensuring businesses remain profitable while pursuing a cleaner future is critical for the transition towards a low-carbon future. As much as this seems like an excuse for companies to distance themselves from sustainability commitments, one should ponder the economic and social consequences of enormous unemployment and government tax revenue reduction if corporates cannot sustain their operations and remain competitive in the global market.
Besides, the developed world’s stranded assets should not be neglected when discussing challenges regarding energy transition. On the societal level, changing vehicles and appliances to low-carbon alternatives can be unaffordable and is not an immediate option for many low-to-middle income households. An overly hasty push towards zero-carbon without considering the bigger picture could result in economic hardship, causing social and political instability. Therefore, having a comprehensive framework that provides a clear transition pathway is vital for these countries.
On the other hand, the energy transition is a very different story for the developing world. Achieving net-zero emission can be significantly more challenging for some developing countries where a rapid increase in energy demand is expected. In short, many of these countries are still in the phase of fuel addition instead of fuel substitution. This is especially true since as these economies develop and living standards improve, the lower income communities will gain increased access to energy service demand such as mobility as well as higher quality heating and cooling. There is an intense dilemma between going green and providing immediate, affordable energy to meet the growing demand. Many poor communities in these countries still do not have access to sufficient energy for equitable living conditions. Attempting to leapfrog to renewable fuels to meet the growing demand can be challenging. Besides, many of these countries also have other pressing national priorities such as universal access to education and clean water, while the financial resources are limited.
Due to the many challenges that developing countries face simultaneously, the energy mix should not focus solely on environmental sustainability. The choice of energy sources must not neglect energy security and energy affordability. Although solar panels’ price has decreased drastically over the past few years, the capital investment required for renewable energy projects is still significant for many developing countries. Furthermore, many developing countries do not have a mature renewable energy industry and will need to rely on the developed world for renewable technologies.
Hence, understanding the diverse underlying challenges in the global energy transition, it is time to stop the blame game and recognise the need for international cooperation to achieve energy transition and collectively mitigate climate change.
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