Much of the news coming from the UN Climate Conference focuses on the spectacle and countries failing to meet their commitments to prevent dangerous climate change. But behind the scenes, there is reason for hope.
The energy transition has already begun in many countries, as price declines make renewable energies ubiquitous and more affordable than fossil fuels. A growing number of world leaders agreed at the climate summit to cut methane emissions and strive for zero emissions. More than 40 countries have pledged to phase out coal-fired energy over the next two decades.
Today, government officials are challenged to figure out how to dramatically increase the use of clean energy while reducing fossil fuel emissions while meeting the rapidly growing energy needs of billions of people in developing countries and countries with economies in transition. With the ongoing energy crisis creating shortages and record high prices in several countries, getting to this early stage of the energy transition requires sound policies and plans with clearly defined priorities.
As climate policy experts with years of experience in international energy policy, we have identified six strategic priorities that can help countries navigate this complex area.
1) Wider adoption of pricing and carbon markets
Only a few countries, states and regions currently have a high enough carbon price to force pollutants to cut their emissions.
The carbon price, often set through taxation or the carbon market, reflects the cost of damage caused by greenhouse gas emissions that companies are not currently paying for, such as climate change, crop damage, and rising health costs. This is especially important for energy and energy-intensive industries.
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One of the goals of the Glasgow talks is to write rules that will help carbon markets function well and transparently. This is essential for the effective achievement of many of the zero-zero climate targets that have been announced by countries from Japan and South Korea to the United States, China and the European Union. It includes rules for the use of carbon offsets that allow individuals or companies to invest in projects elsewhere to offset their own emissions. Carbon offsetting is currently a major controversy and does not provide reliable credits for emissions.
2) Focus on sectors that are difficult to decarbonize.
Shipping, trucking, and industries such as aluminum, cement and steel are difficult places to cut emissions, in part because they have not yet tested available fossil fuel substitutes. While there are some innovative ideas, concerns about competitiveness – for example, companies moving production out of the country to avoid regulation – have been a key impediment to progress.
Europe is trying to overcome this barrier by creating a carbon boundary mechanism that will tax imports of goods that are not subject to the same level of carbon taxes at home.
The United States and the European Union also announced at the summit that they will be working to negotiate a global deal to cut high emissions from steel production.
3) Connect China and other emerging economies
It is clear that the use of coal, the most carbon-intensive fossil fuel, must be phased out quickly and is critical to both the UN energy agenda and the fight against climate change. With more than half of the world’s coal consumed in China, his actions stand out, although other emerging economies such as India, Indonesia and Vietnam are also critical.
It won’t be easy. Notably, half of China’s coal-fired power plants are less than ten years old, which is part of the normal life of coal-fired power plants. China has increased its climate commitments, including pledging to achieve zero emissions by 2060 and agreeing to end funding for coal-fired power plants in other countries, but its current path will not see significant cuts this decade.
The Indian Prime Minister’s major COP announcement of a zero target for his country by 2070, with interim emission targets up to this point, is a first win.
Indonesia and Vietnam signed a pledge to phase out coal-fired power, but Indonesia made some reservations. He said he would “consider accelerating the phase-out of coal by the 2040s,” but made it a condition of receiving more international financial and technical assistance.
4) Focus on innovation
Supported by innovation, advanced renewable energies and electric vehicles are much faster than expected. Perhaps more. For example, offshore wind, geothermal energy, carbon capture and clean hydrogen are new developments that could make a big difference in the coming years.
At the climate conference, a coalition of world leaders launched what they call the “Breakthrough Agenda” —a framework for bringing governments and businesses together to collaborate on clean energy and technology. Breakthroughs in Glasgow include making electric vehicles an affordable norm, lowering clean energy costs, increasing hydrogen storage and bringing steel production to near-zero emissions by 2030.
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Countries and companies developing these new technologies will reap economic benefits, including jobs and economic growth. More opportunities exist in market design, public acceptance, fairness, regulatory frameworks, and business models. Energy systems are deeply intertwined with social problems, so their change will be successful only if solutions are oriented not only to technology, but also to the needs of society.
5) Priority of green financing
More than 160 banks and investment groups are part of another coalition that has agreed to put pressure on high-emission industries by linking lending decisions to the goal of achieving global zero emissions by 2050.
Increasing green finance will require transparent taxonomies or guidelines for defining green and clean investments; evidence-based transition plans for companies and financial institutions; and a closer look at portfolios of financial institutions, taking into account the risk of significant non-performing fossil fuel assets, such as coal-fired power plants, which have not yet reached the end of their useful lives but which can no longer be used.
Meeting the financing needs of developing countries for the transition period must be a top priority.
6) Reduce short lived greenhouse gases
On November 2, 2021, the Biden administration announced a comprehensive set of regulations to reduce emissions of methane, a greenhouse gas many times more powerful than carbon dioxide that comes from leaks from oil and gas infrastructure, coal mines, agriculture and landfills. Methane doesn’t stay in the atmosphere for that long, so stopping emissions may have faster climatic benefits while reducing carbon emissions.
The US and the European Union have also made a new global commitment to cut methane emissions by almost a third by 2030. More than 100 countries have signed it.
A coalition of this type, based on a narrowly focused issue, could lead to significant emission reductions in places that are less likely to support broader climate agreements.
It is likely that discussions at the UN on energy and climate issues will continue to advance in spurts. This work needs to be done at a more practical implementation level, for example in states, provinces and municipalities.
If there is anything we have learned, it is that climate change mitigation will be a long-term endeavor. While it is undeniable that the benefits of reducing greenhouse gas emissions far outweigh the costs, policymakers need to show that many of the emerging energy transitions are beneficial to the economy and communities and can create long-term jobs and tax revenues.
This article is reprinted from The Conversation under a Creative Commons license. Read the original article.