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A global energy transition is happening; let’s make it just, fair and equitable

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(C) Global Warming Images/WWF(C) Global Warming Images/WWF

By Santiago Lorenzo

We are in the throes of a global energy transition, and a new WWF report called Signals of the Global Energy Transition highlights the unstoppable long-term trend.

This energy transition, as with many other historical transitions, is based in the change in market forces due to technological innovations. We are witnessing a destructive creation, new adopted and adapted technologies shaping a key market for the economy: the energy market. These new technologies displace those we are used to have and some sectors need to adapt or be displaced. The energy transition has multiple effects. As energy is a basic input for all production processes, this change impacts many other fields of the economy and is reshaping our societies.

WWF advocates for this transition to be accelerated to avoid dangerous global warming that could have huge impacts in nature and humankind. The current energy transition from fossil fuels to renewable sources will benefit all by helping us face dangerous climate change.

In a creative destruction process there are always winners and losers and accelerating this process might increase the transition tensions.

Addressing negative impacts of the transition, particularly those in the most vulnerable sectors of society, is necessary, and must be in line with the UN Sustainable Development Goals (SDGs).

Current energy systems are not just

It is a fact that current global energy systems are not just. Firstly billions of people live without access to clean and reliable sources of energy. Secondly, low income households spend a larger proportion of their income on energy services [than higher income households] subsequently hindering opportunities to accumulate the needed wealth to escape from poverty. These two elements of energy poverty subsequently bring about other serious problems such as gender inequity, social injustice and environmental degradation.

WWF’s mission ‘‘to stop the degradation of the planet’s natural environment and to build a future in which humans live in harmony with nature’’ embraces the spirit behind the SDGs to align the human footprint with what science dictates for sustainability.

Signals for an energy transition abound

The report shows how unexpected actions are already taking place despite the institutional inertia and the mature markets of fossil fuels. It highlights the “signals” for the energy transition: New generation infrastructure in renewables is booming – 90 per cent new electricity generation globally in 2015 – above traditional fossil fuel; this trend only can sharply increase as renewable technologies are maturating and benefiting of economies of scale – solar PV is becoming the cheapest form of power generation; investments in renewable energy are steady but firmly increasing each year; renewables have been able to cover the total energy demand in specific days already in some countries; the renewable energy industry is also creating millions of jobs around the world.

In this transition, China is leading the way, increasingly investing in renewable technologies. But beyond giant energy consumer countries like China, the US and India, countries without large grid infrastructures understand the opportunities in renewable energy. Sub-Saharan Africa, for example,  is the largest market for off-grid solar products and it is largely investing on it; business in different sectors are increasingly contributing to the change by adopting science based targets in line with the global common goal of keeping global warming below 2°C, even 1.5°C.  The transition also needs investments and ad hoc financial vehicles and we are seeing the green bond market skyrocketing now.

The use of coal, the worst greenhouse gas emitter fossil fuel, is already diminishing.  China – the world’s largest consumer – seems to be on the eve of a decline in its consumption, and there are numerous reports of bankruptcies in the coal market.

The report illustrates many examples where the transitions are running faster than previously expected. The forecast for renewables, for example, were never as optimistic as their deployment has happened.  In addition, societies are increasingly aware of the benefits of this transition and they are acting, increasingly demanding sustainable energy for all and as an effective and efficient way to address climate change risks.

Making the energy transition equitable and fair contributes to building up human harmony with nature. However, our approach is not only about making just the transition, but enhancing the possibilities of transforming the future energy system in one that founds a more equitable society.

The characteristics of the innovative energy technologies allow the new energy system to be more distributed, interdependent, less centralised and interactive. These features open the alternative to a more economically balanced system and setting the ground for a fairer economic system.

Common interest must prevail 

WWF recognises that the transition to be just will face many obstacles, but the common interest must prevail. Climate change is already here and impacting many communities and ecosystems and humankind has the technologies available to accelerate the transition, it is time to make the adequate decisions to effectively face the risks ahead.

The energy transition is a complex process involving many aspects of human societies. WWF is still exploring how a just energy transition can be better carried out. For WWF, it is clear that partnering with a wider set of likeminded organisations from different constituencies is key.

WWF’s  energy transition guiding principles

  • It is not about climate change only, it is about development too.
  • A first step is to societies to agree on a vision on the new type of society that a just energy transition will lead to.
  • A just energy transition must be framed in the UN’s Sustainable Development Goals.
  • It is about engaging all sectors of society and all stakeholders in an open participatory process.
  • While the just energy transition concept refers mainly to workers and communities conditions and opportunities, and about safety nets, it also implies changes in many other aspects of society.
  • The long-term common good should steer the process.
  • The just energy transition processes require open public engagement, but framed in a tight timeline; climate change is already happening.

Any transition opens the opportunity to improve our societies. The just energy transition is critical for achieving a better world for all and cannot be just about the transition, we must embrace the challenge to make it happen.

Santiago Lorenzo is WWF’s lead on Global Climate and Energy Finance Policy. He is  based in Mexico City.

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