COP26.
(Credit : @COP26/twitter)
Much of the news coming out of the United Nations (UN) climate conference has focused on the spectacle, and how countries’ pledges aren’t on track to prevent dangerous climate change. But behind the scenes, there is reason for hope.
In many countries, the energy transition is already underway as falling costs make renewable energy ubiquitous and more affordable than fossil fuels.
The challenge for government officials now is figuring out how to help scale up clean energy dramatically while reducing fossil fuel emissions, and still meeting the rapidly growing energy demands of billions of people in developing and emerging economies.
With an ongoing energy crisis creating shortages and record high prices in several countries, navigating this early stage of the energy transition requires thoughtful policies and well-prioritized plans.
As climate policy experts with decades of experience in international energy policy, we identified six strategic priorities that could help countries navigate this tricky terrain.
Only a few countries, states and regions currently have a carbon price that is high enough to push polluters to cut their emissions.
One goal of the Glasgow negotiations is to write rules to help carbon markets function well and transparently. That’s essential for effectively meeting the many net-zero climate goals that have been announced by countries from Japan and South Korea to the U.S., China and those in the European Union.
It includes rules on the use of carbon offsets, which allow individuals or companies to invest in projects elsewhere to offset their own emissions. Carbon offsets are currently highly contentious and not delivering trustworthy emissions credits.
Europe is trying to overcome this barrier by establishing a carbon border adjustment mechanism, which would tax imports of goods that didn’t face the same level of carbon taxes at home.
The United States and the European Union also announced at the summit that they would work to negotiate a global agreement to reduce the high emissions in steel production.
It is clear that coal, the most carbon-intensive fossil fuel, needs to be phased out fast, and doing so is critical to both the U.N.‘s energy and climate agendas. Given that more than half of global coal is consumed in China, its actions stand out, although other emerging economies such as India, Indonesia and Vietnam are also critical.
A major announcement by India’s prime minister at the COP around a net-zero goal for his country by 2070, with interim targets for ratcheting down emissions before then, is an early win.
Support for innovation has brought cutting-edge renewable power and electric vehicles much faster than anticipated. More is possible. For example, offshore wind, geothermal, carbon capture and green hydrogen are new developments that can make a big difference in years to come.
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. The Glasgow Breakthroughs include making electric vehicles the affordable norm, bringing down clean energy costs, scaling up hydrogen energy storage and getting steel production to near-zero emissions, all by 2030.
Over 160 banks and investment groups are involved in another coalition that has agreed to put pressure on high-emissions industries by tying lending decisions to the goal of global net-zero emissions by 2050.
Ramping up green financing will require transparent taxonomies, or guidelines, for defining green and clean investments; science-based transition plans for companies and financial institutions; and a hard look at portfolios of financial institutions given the risk of substantial stranded fossil fuel assets, such as coal power plants that haven’t reached the end of their life spans but can no longer be used.
Meeting the transition funding needs of developing economies should be a high priority.
The U.S. and the European Union are urging the entire world to cut methane emissions by nearly one-third by 2030. According to the White House, more than 90 countries are on board.
This type of coalition, based on a tightly focused issue, can bring meaningful emissions reductions in places that are less likely to support broader climate agreements.
It is likely that U.N. energy and climate deliberations will continue to move in fits and starts. The real work needs to take place at a more practical implementation level, such as in states, provinces and municipalities.
(Dolf Gielen is a Director for Technology and Innovation at the International Renewable Energy Agency and Payne Institute Fellow, Colorado School of Mines)
(Morgan Bazilian is a professor of Public Policy and Director, Payne Institute, Colorado School of Mines)
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