Reducing carbon emissions is an important and necessary aim — but it should not cause us to ignore the energy needs of the billions of underprivileged people around the world.
The start of the year is a time for reflection and to look ahead. This year, already a uniquely challenging one, is no exception. The brutal shock of Covid-19 and the global health emergency has left deep scars in societies and has had very uneven impacts on communities, industries, and economies across the world.
Our industry, energy, is no exception. The resilience of electricity systems has been tested and the impact on other sectors and forms of energy — heat and liquid fuels — have exposed new vulnerabilities. In many countries, the gap between those who have access to clean, affordable, reliable energy and those who do not has widened.
Access to modern energy is easily taken for granted and questions of affordability and financial sustainability are being overlooked. Household energy debt, fuel poverty and defaults on bill payments are increasingly in evidence everywhere. As we light, heat, or cool our homes at this time, let us all remember that hundreds of millions of people continue to live without access to electricity and billions more lack energy for clean cooking, heating and better livelihoods.
"Are key decisions, including major policy moves, being driven by concerns about the end of this week, the end of the world, or both?"
Yet still we seem to be betting on new energy generation technologies, many of which are at best in their infancy, with little thought about our future energy needs and uses which have been a hallmark of progress in the past. There appears to be a belief that capital market investment alone can save the day in the "race to zero".
Social energy agenda
We are concerned that discussions on the energy transition continue to neglect the social energy agenda and the context of energy affordability. Energy literacy is poor among many decision makers and the conversation must look beyond peak demand for oil or coal — or carbon — to anticipate new energy users, uses and shifting demand.
A check is urgently needed to address the new energy reality to meet the needs of over 5-billion people — for better quality jobs, and for the energy-related incomes which fund government budgets, deliver pensions to the elderly, finance global capital markets and power the engines of global trade.
Energy has always been, and remains, the lifeblood of all human development and progress. It is the ultimate connector of hopes and fears for people across the world. Clean energy and flexible storage needs can only be responsibly met through investment in renewables and other forms of net-zero carbon heat, power, and liquid fuels. The race to zero ignores this nuance and instead risks extreme polarisation. Are key decisions, including major policy moves, being driven by concerns about the end of this week, the end of the world, or both?
The story of the human race has never been a race to zero but an infinite game of human development, with an evolving concept of progress. A new, more comprehensive, and nuanced narrative is urgently needed in 2021 — one which enables a better-quality discussion on the challenges of securing more energy and climate neutrality in a new context of affordability and social justice.
We owe it to ourselves and our children to open a courageous and more honest conversation about how to help societies to manage and better address the unintended consequences of a faster-paced energy transition. Debates about technology cost curves or the price of carbon are not necessarily the right place to start the conversation. We also need to begin with the unpredictable uncertainties about demand and be imaginative about new possibilities.
A clear blind spot is how we manage the full costs to societies of a faster-paced energy transition. Energy literacy, including new thinking about future demand, is a great enabler of more informed choices. The lack of those choices by investors, climate activists and policy shapers are as great a risk to the future of humanity as, and even more pervasive than, the lack of financial literacy in modern life.
It is hoped that by the time of Cop26, discussions on establishing new metrics for the “S” in ESG reporting will not be starting but concluding. Hopefully, by the end of 2021, we in the world energy community will have helped societies to reconnect energy with its social purpose — and in a way which inspires future generations to keep progressing and to reach for the stars.
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