A just energy transition

We are in the fight of our lives. And we are losing. Greenhouse gas emissions keep growing.

Global temperatures keep rising. And our planet is fast approaching tipping points that will make climate chaos irreversible…We are on a highway to climate hell with our foot on the accelerator…Humanity has a choice: cooperate or perish. It is either a climate solidarity pact — or a collective suicide pact.”

These were COP27 opening remarks from António Guterres, Secretary General of the United Nations. Let’s take a deep dive into this opening remark…

Developing countries now contribute a significant amount of global emissions, and this share is growing at a fast pace, mainly due  to high dependence on coal fired power plants or fossil fuels to support the growing industry.

Disproportionately, business activities from the wealthy citizens of the world, irrespective of their nationality is responsible for global warming.

These activities have pushed climate change indicators like greenhouse gas concentrations, sea level rise, ocean heat and ocean acidification to a record high in 2021.

This is a clear sign that human activities are causing planetary-scale changes on land, in the ocean, and in the atmosphere, with catastrophic implications and results.

These facts summarise the challenge of coming up with an agreement that assigns fair emissions targets to nations and hence the heated debate in all Climate Change summits.

We need to find answers to a number of questions. Will the road decarbonisation be fair?

Will Climate Change Funds be fairly apportioned? What fair criteria should be used to allocate these funds?

Let’s take a deep dive as I give personal opinion on how we can walk through the pathways to fair decarbonisation as we try to solve the Climate Change Matrix.

Undoubtedly, the only conclusive way to deal with this crisis is to end the world’s reliance on energy generated from fossil fuels, the main cause of climate change.

Before the industrial revolution, Greenhouse gas emissions were barely at their minimum and almost constant.

Emissions started going up gradually with first, second, third and fourth revolution; Coal in 1765, Gas in 1870, Electronics and Nuclear in 1969, Internet and Renewable Energy in 2000 respectively.

Meanwhile, development in the Third World has not kept pace and is lagging behind.

This has created a huge industrialisation gap between the First and the Third world.

Meanwhile, industrialisation has started to boom in the developing world as industries relocate to the developing world where natural resources are still in abundance.

This has created a surge in energy demand. Unfortunately, the most commonly used form of energy generation in the developing world is coal.

Consequently, greenhouse gas emissions have gone up in the developing world.

At the same time, Climate Change summits are advocating for less use of coal powered power plants to other clean and renewable sources of energy globally.

The investment requirements to such a transition are beyond reach for most of the developing world.

Now, how will the developing world fund the transition to clean and renewable energy so that they honour the Sustainable Development Goals and save the one planet we have?

Undoubtedly, the transition to renewable energy is creating new socio-economic opportunities for countries and organisations across the world.

Addressing climate change, has become ever more urgent. Promoting energy access through transition to renewable energy will ultimately reduce energy poverty for the developing world!

This rapid scaling-up of renewables will avoid irreversible climate impacts.

This shift in the global energy system to renewables would grow the world economy by one percent till 2050, translating into a cumulative gain of more than USD52 trillion.

Climate change, despite being a global problem, is creating islands of opportunities especially with the advent of ESG and Impact Investing.

Despite Impact Investing’s focus on the developing world there is a dilemma of willingness to pay (WTP).

A WTP threshold, is a value used to represent “an estimate of what energy tariff a consumer of electricity is prepared to pay for the use of electricity” and is often based on a country’s per capita gross domestic product.

Suppliers of electricity, mostly national utilities and independent power producers will generate and dispatch power when the consumer is willing to pay an economic tariff.

An economic tariff is the energy price that will allow the producer to pay their fixed, variable cost and amortizatise the plant over its useful life.

In the absence of subsidies or government grants, power producers will charge a higher tariff which in most cases reduces the customer’s willingness to pay for the consumption of electricity.

The question now is, who should provide the subsidy to enable energy transition?

A key phrase at the just-ended COP 27 conference was ‘loss and damage,’ The pressure is mounting on wealthy nations to admit to their role in climate change and contribute finances to the nations experiencing the worst consequences of this.

Wealthy nations are seen as reluctant to help energy transitions in developing countries.

The situation is dire so much that some countries from the Global South are considering going through international courts in the future to receive the money promised.

Wealthier countries are still not delivering on the $100 billion per year climate aid promised by 2020

What other solutions are available to mitigate Climate Change (Carbon Mitigation Initiatives)

To fully understand fair energy transitions and pathways countries can choose, let’s have a quick look at different ways to reduce emissions other than just using renewable energy.

To make the subject fun, interactive and inclusive, I will introduce you to The Wedges Game (Credit: Carbon Mitigation Initiative, Princeton University.)

The Wedges Game is a team- based exercise that helps players understand the scale of the climate change puzzle and the technologies that already exist to mitigate carbon emissions and define different pathways to energy transition to build climate resilient communities.

In the Wedges Game, players pick eight technologies to construct a carbon mitigation portfolio, filling in the eight wedges of the stabilisation triangle.

These technologies include: Efficiency, Fuel switching, Carbon Capture and storage, Nuclear energy, Wind, Solar, Biomass Fuel and Natural Sinks.

To play the game and appreciate Climate Change Mitigation strategies, visit the link

https://cmi.princeton.edu/resources/stabilization-wedges/introduction/ and lets all be conscious that the environment we live in, we borrow it from our kids and lets be responsible and play our part to save the only planet we have…

In our next issue we will take a deep dive into climate mitigation initiatives.

Mike Eric Juru is the Chairman of the Green Building Council of Zimbabwe. He can be contacted on mejuru@intpro.co.zw or 0773 805 000. He writes in his personal capacity