Will global energy transition be stalled?
The dramatic drop in global oil prices raises questions on whether major changes in the mix of energy for reducing emissions of greenhouse gas will take place within the desired time frame. The Paris agreement on climate change and the underlying science require a rapid move towards higher efficiency of energy use and non-fossil fuel-based energy supply, if we have to limit temperature increase by the end of this century to two degree Celsius (or 3.6 degree Fahrenheit), relative to pre-industrial levels.
In general, major changes of the nature that is required often gets stalled by rigid attitudes and inflexible policies as well as the existence of physical assets based on past patterns of energy use, replacing which may involve costs and complexities. Altered public perception on issues of societal importance do not always result in early action, because responses on the ground are often inhibited by in built inertia. Delays also occur because of frozen attitudes, which reflect established lifestyles and behavior, compounded by doubts in the minds of the public on what action to take, if any.
In addition, vested interests are also responsible for resisting change, as has been the case with action to curb the consumption of tobacco well after the scientific evidence identifying its carcinogenic effects on the human system was firmly established. Action is generally accelerated when it is driven by a set of multiple objectives or an upsurge of emotions in favor of collective action.
In the industrialised countries, particularly the US, low oil prices are leading to higher sales of SUVs and gas guzzling automobiles, apart from a slowdown in other steps to reduce GHG emissions. However, in several developing countries there are future opportunities for major changes, which go beyond possibilities in the industrialised world. In these nations a large part of the population lives without access to modern forms of
Global attention to this problem has been missing, as indeed is the case within those countries themselves. It is only now with the acceptance of the Sustainable Development Goals by the UN General Assembly that this problem has been highlighted at the global level. These 17 SDGs include action in various sectors of human endeavor, of which the seventh SDG aims to “Ensure access to affordable, reliable, sustainable and modern energy for all”.
Energy was not included in the Millennium Development Goals established by the UN at the beginning of this century, because the prevailing view, particularly in the US administration, was that energy problems would be solved through market solutions; there was, therefore, no need for Governments to intervene in this sector. Yet, at that stage there were about 1.4 billion people in the world without access to electricity, and almost twice this number used fuels such as twigs, animal dung and other poor quality biomass for cooking on ill-designed cook stoves, which resulted in widespread drudgery for women and large emissions of smoke and serious health consequences for those who were exposed.
A technological transformation of cooking and lighting for the energy deprived segments of people in the developing countries, will reduce deforestation, improve their health status, enhance cleanliness of their homes and reduce overall emissions of GHGs. Consequently, the Green Climate Fund, which has been established and other financial mechanisms can promote the use of renewable energy for lighting in such homes and the dissemination of improved cook stoves.
Financing of these initiatives can be carried out to support market-based solutions which will not evolve on their own, with the high front end costs relative to the low incomes of the people involved. That would ensure a swift transition from inefficient use of fuels, including biomass, to the use of renewable energy and higher efficiency of biomass burning.
Correspondingly, the challenge of transforming the energy system in the developed world is formidable. US President Barack Obama’s initiative in using the executive branch of the US Government for reducing GHG emissions helped in persuading other countries to reach an agreement in Paris. This approach, and the role of the US-Environmental Protection Agency in reducing emissions from coal-based power generation has now been questioned by the US Supreme Court. The 5-4 decision of the apex court to halt the EPA’s rules to curb emissions from power plants has been described by the White House as “a bump in the road”. But, in the minds of others across the world, this decision raises questions about the ability of the US to take effective action as part of the Paris agreement, given overwhelming odds against congressional action to curb emissions.
It is significant that the 2015 World Oil Outlook published by Organisation of the Petroleum Exporting Countries projects a significant increase in demand for oil, going up from 91.3 million barrels (mbd) in 2014 to 109.8 mbd by 2040 in the reference case scenario which they have developed. It also puts forward the view that in the next 20 years, oil will remain the fuel with the largest of global energy use, and that oil and gas are expected to supply around 53 per cent of the global energy mix by 2040, similar to current levels.
These projections fly in the face of what is required if we have to deal with climate change as envisaged in the Paris agreement. The Intergovernmental Panel on Climate Change had clearly put forward in its Fifth Assessment Report the finding that if temperature increase by 2100 has to be limited to two degree Celsius then emissions in 2050 would have to be 40 per cent to 70 per cent lower than 2010 levels. This would require a major shift to low-and zero-carbon sources of energy supply, as well as solutions involving bio-energy with possible carbon capture and storage. A move away from fossil fuels and consequent reduction in GHG emissions will also lead to several co-benefits, such as higher energy security and lower levels of pollution at the local level.