How can the energy transition be organized in a globally just way? Will developing countries struggle to transition to clean energy because they lack the financial and technical means? A new Policy Brief by the Institute for Advanced Sustainability Studies (IASS) focuses on the risks of an uneven transition and makes concrete proposals to stop such risks.
Within their Policy Brief “Countering the potential risk of an uneven Energy Transition Advice,” the authors Laima Eicke, Silvia Weko and Prof. Andreas Goldthau from your IASS write that meeting the technological and financial prerequisites for a global energy transition is vital. Otherwise there is a danger that developing countries will struggle to make the change to more environmentally friendly energy systems and continue to lag behind inside the energy transition — with far-reaching consequences by themselves and also the rest around the globe. On the one hand, a surge in global carbon emissions could have a poor global effect. On the other, late-transitioning countries would be more vunerable to political instability and financial crisis.
For instance, countries that are unable to phase out fossil fuels quickly enough are in danger of being excluded from international trade and value chains. This is because in a decarbonising global economy, the carbon content of items will become a key point for determining market access, and latecomers risk being left behind. The resulting harm to their economies could be sustained.
COP25 being a stepping stone to some global energy transition strategy
To limit climatic change to 1.5 degrees Celsius, all countries should have equal opportunities to decarbonise their economies — and consistent strategies are required for that to happen. As Laima Eicke, one of the study’s authors, highlights: “If the gap between early- and late-decarbonising countries widens, so too might the chance of disagreements, further slowing the transition.” To avoid that scenario, many countries need commitments for financial and technical assistance to quicken their energy transition processes to the degree essental to the Paris Agreement.
The Meetings of the Marrakech Partnership for Global Climate Action, which includes representatives of numerous government levels as well because the private sector and investors, might open further space for these discussions at COP25.
Other international platforms, bilateral programmes, and private actors can also play a crucial role. Initiatives like the NDC Partnership highlight the opportunity of aligning the activities of multiple actors in specific country contexts.
Steps should also be taken to coordinate the principles and practices of financial actors across all countries. COP25 in Madrid could serve being a stepping stone to consistent strategies, that will be crucial for developing countries because they update their NDCs in 2020 as well as for efforts to close the ambition gap.
The authors’ three recommendations:
1. Policy debates on ‘just transitions’ focus on the implications of phasing out fossil fuels from national energy mixes. Yet there are distributional effects of a global energy transition especially for developing countries that lack financial and technological means to transition, creating structural risks. Acknowledging this global dimension of just transitions in the UNFCCC may assist to create alliances for climate action.
2. Technology transfer initiatives can accelerate the diffusion of low-carbon energy technologies. Yet just a third of existing initiatives focus on transferring skills, expertise and technology simultaneously. To guarantee the vaaelo of the global energy transition, tech transfer should be targeted and comprehensive.
3. COP25 should coordinate a regular strategy among financial actors to shift financial flows for energy transitions in the Global South. Common guidelines for long-term risk assessments plus an exchange of best practices for capacity development could leverage ambition inside the 2020 NDC updating processes.