To ensure a more inclusive global energy transition, advanced countries must enhance their engagement with developing nations, according to a recent report by the International Energy Forum (IEF) which highlights the risk of a “north-south divide” that could hinder the progress and priorities of the energy transition.
The report, titled “Shaping a Living Roadmap for Energy Transition,” is the result of roundtable discussions conducted over the past ten months in various locations worldwide, including Cape Town, Bali, Riyadh, Washington DC, Panama City, and Davos.
The findings bring together insights from 350 participants representing industry, government, and civil society, aimed at learning from the recent energy crisis and its profound impact on energy policies and priorities globally.
Prepared in collaboration with S&P Global Commodity Insights, the report’s discussions, led by IEF secretary general Joseph McMonigle and S&P Global vice chairman Daniel Yergin, revealed a growing consensus that a linear transition to a single net zero pathway is insufficient. Instead, a “multidimensional” approach is needed, one that takes into account the diverse situations in different parts of the world, varying starting points, policy approaches, and equity considerations.
The global energy system has faced multiple shocks, crises, and tensions, making the transition complex as it encompasses climate goals, energy security, energy access, affordability, and other priorities, according to Yergin. Transitioning to a $100 trillion (£728 billion) global economy in just a quarter century is a monumental challenge.
The report acknowledges concerns raised by participants in the roundtables, indicating that focusing solely on achieving net zero emissions by 2050 might jeopardise the accomplishment of other sustainable development objectives. It could also limit financing for crucial energy projects and erode public support for climate policies.
Developed markets have witnessed significant policy advancements, with substantial funding and incentives dedicated to emission reduction in the United States, Europe, Japan, and China. Efforts also include research into decarbonisation technologies, such as carbon capture, and expanding the market share of electric cars.
“The path to net zero will have to travel via the global south and therefore it is in everyone’s interest to collaborate and cooperate for the shared goals to achieve net zero,” said the study.
Developing countries, arguing that they bear little historical responsibility for CO2 emissions, are projected to drive energy demand growth for the next three decades. Access to fossil fuels remains crucial for raising their standard of living before they can alter their emission trajectories.
In conclusion, the report urges advanced countries to work hand in hand with developing nations to achieve shared goals and ensure an equitable and comprehensive energy transition that encompasses the entire world.
The International Energy Forum (IEF)
The International Energy Forum (IEF) is the world’s largest international organisation of energy ministers from 72 countries, including both producing and consuming nations. With a broad mandate to examine all energy issues, from oil and gas to clean and renewable energy, sustainability, energy transitions and new technologies, data transparency, and energy access. The IEF is a forum for officials, industry executives, and other experts to engage in a dialogue of increasing importance to global energy security and sustainability.
About S&P Global Commodity Insights
S&P Global Commodity Insights is a division of S&P Global, a connector that brings together thought leaders, market participants, governments, and regulators to co-create solutions. With coverage of oil and gas, power, chemicals, metals, agriculture, and shipping, S&P Global Commodity Insights is seen as critical to navigating the Energy Transition.
