Summary

The world is undergoing monumental changes to its energy regime, shifting from carbon-rich fossil fuels to low-carbon energies in what has been termed the "energy transition". However, many questions remain unanswered about the emerging low-carbon energy era. This article examines five questions that could define the future of the global energy transition.

Five Questions that May Define the Future of Global Energy Transition

 

The world is in the midst of an unprecedented energy transition fueled by concerns about carbon emissions and global warming. To drive this goal, initiatives like the 1.5°C Paris Agreement goal have helped mobilize investments in clean energy and switch from oil and other fossil fuels. Last year, global clean energy investments hit $1.1 trillion, which could significantly increase following new developments like the US 2022 Inflation Reduction Act (IRA). Similarly, a recent report revealed that US government subsidies for clean energy have surpassed oil subsidies, signaling a positive trend towards cleaner and low-carbon energy sources.

 

However, despite these advancements, several unanswered questions cast a shadow on the road to the energy transition, creating an atmosphere of uncertainty, fear, and deep-rooted concerns. Since the fate of the energy transition depends not only on sophisticated technologies but also on fine details, these pressing unanswered questions demand attention and innovative solutions. Thus, this essay highlights five unanswered questions that could define the future of the global energy transition. These questions provide unique opportunities for research, technology development, and policy solutions across different regions.

 

How much would the global energy transition cost?

First, the actual cost of the energy transition remains controversial. There are suggestions that the energy transition will cost trillions of dollars; however, the exact value often varies across reports from leading agencies such as the World Bank and the International Energy Agency. Although climate science is still evolving, such uncertainties on cost are often misleading and could hamper global efforts. Related to the cost of the energy transition is the question of who should fund it. Should funding come from private companies, developed countries, or multilateral agencies? Or should “everyone fend for themselves”? Each option is controversial and consequential.

 

Who owns and controls access to the technologies for the energy transition?

Second, an effective energy transition and fight against climate change hinge on sound technological development. However, aside from maximizing existing decarbonization technologies, building effective pipelines for futuristic ones, and equipping the workforce for emerging clean energy opportunities, another critical concern is who owns and controls energy transition technologies. During the COVID crisis in what is now termed “Vaccine Apartheid,” developed countries hoarded vaccines for their citizens only, leaving developing countries in the cold. Sadly, there are few guardrails to prevent this from reoccurring with the global energy transition, whether internationally (inter) or within a country (intra).

 

The financial cost is one of the unanswered questions about the energy transition

 

However, in addition to reducing reliance on oil and tackling global warming, the energy transition may create new dependencies where powerful countries have too much power over others. This could happen because of access to, control over, and ownership of energy transition technologies. A situation where few countries control financial and multilateral agencies that shape global outcomes like energy transition or where one country controls over fifty percent of the clean energy market, including solar, wind, refining rare earth metals, battery, and electric vehicle production, is dangerous and counterproductive. Energy (transition) is a critical national security issue, and each country should be able to decide without being unduly tied to the yoke of foreign interests and powers.

 

How do you objectively and accurately measure carbon emissions and the progress made to reduce them?

Third, various technologies (carbon capture and utilization) exist today designed to remove carbon emissions from the atmosphere; however, without a fair, accurate, and objective measurement, tracking the progress in addressing carbon emissions would be hard. You can only improve what you can measure. Unsurprisingly, a sticking point in the energy transition borders on how carbon emission reductions and other targets are measured. As seen in the recent backlash against ESG, the multiplicity and uncertainty of such methods create confusion and encourage abuse.

 

What strategies and policies do countries need to achieve a smooth energy transition?

Fourth, many countries lack the regulatory and policy tools to achieve a smooth, well-planned energy transition. For example, countries have been at loggerheads over an agreeable definition of “green hydrogen,” a favored type of hydrogen and a clean energy carrier. There are also no binding globally accepted standards on aspects of clean energy production, nor are there international mediums designed explicitly for countries to air and resolve disagreements on energy transition. Lastly, many developing countries lack the capital, corresponding policies, or institutional capacity to match landmark energy transition efforts by the US, EU, and China.

 

Many countries still lack the policies and strategies for a successful energy transition.

 

Meanwhile, despite the advantages developed countries enjoy, they face severe challenges in the energy transition. For example, capital always follows profits in free markets, while some investors could stifle the market or go extreme miles to maximize; the energy transition could be no different. So, it is still too early to tell what the long-term effects of policies like the IRA will be and, if they are, whether they will be enough to keep the public’s support, encourage changes in behavior, and naturally encourage private investments in key energy transition areas. However, one constant thing is the place of innovative ideas, strategies, and policies to guide the implementation of energy transition at local, national, and international levels.

 

What are the potential adverse impacts of the energy transition? And how do we address them?

Fifth, as the world embraces clean energy, several socio-economic and environmental problems directly associated with energy transition activities are beginning to emerge. For example, mining critical minerals (for chip production and other aspects of the energy transition) often causes deforestation, groundwater pollution, and other environmental degradation, especially in vulnerable communities. The world is also facing mountains of solar and other electronic waste, with recycling rates lagging behind waste generation rates, raising the risk of environmental pollution. Lastly, there are unresolved issues about the fate of oil-producing developing countries, which are facing significant drops in government revenue and job losses for fossil fuel industry workers as the world shifts from oil to clean energy. This problem could impact governments’ ability to perform their basic functions, leading to public disillusionment, instability, and unrest. These issues call for holistic concepts like just transition and energy justice.

 

In conclusion, despite the global energy transition’s huge promises, burning questions remain, which, if unaddressed, hold significant risks. An oil-powered global economy intertwined across centuries with every fabric of society cannot be wished away on a whim, nor will a low-carbon economy emerge overnight. Therefore, the world must resist the urge for a haphazard energy transition because that would only be as good as the oil economy it seeks to replace. Instead, implementing the energy transition involves many moving parts and, as such, requires strategic planning and regulatory and policy frameworks across international, national, and subnational levels.

 

Idowu Kunlere

(Kunlere is an Energy and Environmental Policy doctoral candidate at the University of Delaware).