Are the global environmental policies currently enabling the transition from fossil fuel to renewable energy? Can we, therefore, agree that the world is currently on an unsustainable path? As of 2012, the world has approximately emitted 9.7 billion tonnes of carbon dioxide into the atmosphere due to the use of fossil fuels (World Resources Institute). In 2019 the projected carbon dioxide emissions had consequently risen to about 37 billion tonnes (Global Carbon Budget 2019). How could such development in carbon emissions be sustainable?
Zero Carbon Emissions and the Paris Agreement
Firstly, the world needs the transition from fossil fuel to cut carbon dioxide emissions to 0% (zero carbon emissions). The goal of zero emissions aims consequently to keep the annual world temperature increase rate below 1.5° Celsius. By doing that the global community would therefore meet The Paris Agreement recommendations. to the contrary, the Emission Gap Report 2020 finds that the global temperature will increase by 3° Celsius. Despite the drop in Emissions in 2020 due to COVID19 Pandemic, the world is far from achieving the goals. In other words, these Outcomes do not meet the Paris Agreement recommendations. But most alarming issue is the increase in global carbon emissions after the COVID19 Pandemic.
Currently, renewable energy contributes to only small share of the global energy consumed (IEA (2020), Global Energy Review 2020, IEA, Paris). For us to realize any significant change, the world should increase this percentage to about 40% to 80%. This means that the policies should encourage or create competitiveness between renewable energy and fossil fuels. The competition can be with or without the need for government support in the transition period.
Local and Global Renewable Energy Transition Policy
Both local and global stratgies of renewable energy transition should determine the outcomes of policy. In Germany for instance, the Federal Government enacted a policy to enable the renewable energy transition, famously known as the >>Energiewende<<. The Term >>Energiewende<< actually means “energy transformation or turnaround”, which transcends as a call for change in the energy sector. On the global level, the UN secretary-general has called the global community to speed up the process of the renewable energy transition. According to the UN, the global community should aim at achieving zero emissions by 2050. But the global fight for climate change has yet to intensify and the call to phase out of fossil fuels still has to gain momentum. We should also not ignore that the global fraternity of nations fears the dependency on more renewable sources like solar power, nuclear energy, wind, and bio-generated energy.
Challenge of Renewable Energy Transition and Fossil Fuels
The world faces challenges in the implementation of the transition from fossil fuels to renewable energy sources.
Assets in the Form of Machinery
The world is full of valuable assets in the form of machinery that consume and emit carbon dioxide. A good example is combustion engine vehicles and coal power stations. Combustion engines have a lifetime of 10-15 years, while coal power stations have a lifetime of 40 years. Firms would be reluctant to retire such assets unless new renewable energy replacements are accessible at efficient costs.
From the above, we can argue that the needed transition to clean energy will take decades. In history, it took decades to fully implement the fuel energy transitions. However, some countries have increased the pace of renewable energy transition through government-imposed emission standards, increasing education on sustainability, and personal relevance of sustainability. The latter is characterized by communities becoming more self-aware of their role to contribute to the solution. We can emphasize the need to make choices not driven by tax incentives or costs, but rather, by the awareness of the need for change.
Oil-dependent economies will definitely feel the impact of the renewable energy transition. Such a global move will affect fossil-fuel-producing and -consuming countries, shifting their production and consumption plans. These Economies need to reform to become less dependent on fossil fuel extraction and sale. They should instead exploit their comparative advantage and shift the game towards increasing the renewable energy market share. Saudi Arabia has taken a massive step in this direction by constructing a $5 Billion Green Hydrogen production facility (Bloomberg). The plant is projected to produce 650 tons of Green Hydrogen. This output would dwarf that of a similar plant in Quebec producing an estimated 9 tons of Green Hydrogen per day.
The dominant players in a clean energy world may be different from those that are dominant in a fossil-fuel-dependent world. Countries rich in natural resources -particularly fossil fuels- have a derived measure of Geo-Political influence. The transition to clean energy will have profound implications on who holds power in the world. Geopolitical risks can be mitigated as demand for fossil fuel falls.
A Renewable Energy-dependent world is more electrified and more digitized. People and organizations will have to increase the protection of data to successfully protect themselves from malicious intent. This requires investments in creating awareness of prevention and security best practices for people and organizations.