How to design an inclusive energy transition?

There is an urgent need to accelerate the global energy transition, as highlighted in the report of the World Economic Forum "Fostering an Efficient Energy Transition 2019". It summarizes the findings of the 2019 Energy Transition Index (ETI), which is now in its eighth year.

The goal of the ETI is to establish an evidence base on the energy transition from which policymakers can measure progress across the globe. The ETI brings together indicators from 40 different energy, economic and environmental datasets to provide a comprehensive, data-driven picture of the global energy system that can be tracked over time. The statistical model underlying the EIT is a rich source of information that can be explored to better understand a host of issues related to the energy transition around the world.

Last year was again a year of record heat. An alarming report from the Intergovernmental Panel on Climate Change has highlighted the urgency of reducing greenhouse gas emissions. Despite this need for change, the ETI found that the energy transition had generally slowed down. The increase from one year to the other of the average global score of the ETI index is the lowest of the last five years. Three years after the political commitment taken in the world through the Paris Agreement, this lack of progress makes it possible to verify in real time the adequacy of the efforts in progress and the scale of the challenge.

The realization of the critical geopolitical dimensions of the energy transition is clear. Fortunately, one of the positive results of the ETI is therefore in the areas of energy security and access to energy. Indicators for these areas continue to grow further, driven by strong gains in electricity access in developing and emerging Asia and increasingly diverse import counterparts across the globe. importers of fuels.

On average, 135 million people had access to electricity each year between 2014 and 2016. Although these access improvements are concentrated in large Asian populations, they occur more widely. Of the countries badyzed that have not yet reached universal access to electricity, 90% recorded an annual gain according to the most recent data available. Kenya and Ethiopia in particular have made considerable progress, improving access to electricity by 14 and 9 percentage points, respectively.

The index data also highlight the evolution of geopolitics of the energy trade. The shale oil revolution in the United States and the rising demand for energy in China have been the main global drivers. In the last 10 years for which data are available, net energy imports relative to total supply decreased by 20 percentage points in the United States and increased by 12 points in China. In comparison, the net energy import levels in the European Union countries have remained relatively stable in recent years.

The report also highlights the need to continue focusing on achieving a balance between poverty reduction and economic growth and environmental sustainability. The complexities described in the report help explain why global carbon emissions have risen in 2018 to an all-time high, and why global coal consumption has increased over the last two years (driven by rising demand in India and Africa). China).

This balance is not only necessary in developing economies and emerging economies. The report of the Index points out that one in three American households is struggling to pay its energy bills, according to a recent survey by the US Energy Information Administration. World Bank data show that the United States has a higher level of income inequality than 33 out of 36 OECD countries. Income inequality has worsened in recent years, after stabilizing in the early 2000s. Despite being the largest economy in the world and its largest energy system, ETI ranks 27th among United States and ranked 89th in terms of environmental sustainability out of 115 countries badyzed.

The two challenges of energy transition and economic equality facing the United States mobilize support for a series of energy and economic policy reforms presented in the Green New Deal. While specific policies are still being developed, the political momentum around these issues offers a great opportunity. The success of a Green New Deal depends on its ability to reduce greenhouse gases and local pollution, while contributing to inclusive economic growth.

As President, Franklin D. Roosevelt implemented the New Deal economic programs that brought the United States out of the Great Depression. Its distant relative, President Theodore Roosevelt, created the country's national system of parks, forests and reserves and instituted a conservative environmental ethic that has spread around the world. Both approaches are needed and more.

Monitoring the energy transition, even imperfectly, helps to inform the global dialogue on the subject. This year's ETI report shows a general lack of dynamism, driven by stalled environmental improvements and mixed results in terms of economic growth and development. That said, most countries are making good progress in the areas of energy access and security. In addition, there are many other positive stories to discover when one delves into the specifics of different countries, and these can get lost in the aggregate index. We encourage the reader to take advantage of the wealth of data available online.

The opinions expressed in this article are binding only on the author and not the World Economic Forum.