JULY-AUGUST , 2023 | ESG
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Figure 2 : European Union Gas Import Prices ( Period July 2020 to January 2023 )
• if the economic theories advanced by Jevons and , more recently , Khazzoom-Brookes or Saunders have a basis , In this case , we are more likely to further increase the energy divide between the rich and the poor nations in the future . The question that must be raised is how this highly probable scenario ( based on economic theory and real responses in 2022 ) is consistent with the much-touted UN objective of a “ just transition ”?
THE ENERGY TRILEMMA – A DREAM FOR EMERGING ECONOMIES ?
The Energy Trilemma ( Figure 3 ) refers to balancing energy reliability / security , affordability and sustainability and its impact on everyday lives .
Empirical evidence has demonstrated that when first-world nations face energy reliability / security concerns , as was the case in 2022 in Europe , noble global energy equity rights are quickly cast aside . Instead , a desperate “ grab ” transpires , resulting in price spikes until the wealthier nations replenish the storage facilities that will be evacuated to quench their energy thirst .
Indeed , in 2022 in the wake of the Russian-Ukrainian conflict and staring a winter of energy shortage , the European Union even modified the definitions of its green taxonomy , urgently permitting the inclusion of nuclear and gas as “ green ” energy resources . It was necessary to avert a continental-scale energy starvation catastrophe . So , what is the solution ? The solution remains the same . A transition into a cleaner environment must be orderly and measured . It must be based on real , available and applicable technologies lest this accelerated journey leads to an alternative scenario – A Probable Evolution into a Future Significant Energy Divide - as shown in Figure 4 .
Figure 3 : The Energy Trilemma
COP 28 – AN OPPORTUNITY TO BALANCE THE NARRATIVE
A “ Probable Future Energy Divide ” is being created . Emerging economies should not allow the learnings from 2022 go to waste whilst developed nations must understand that unless the emerging economies also chart a path to net zero , there is no viable , holistic climate change agenda for the planet .
When COP 27 , held in the Egyptian resort of Sharm El-Sheikh between
2015-2050
Emerging Nations Unable to Afford Clean Forms of Energy to Fulfill Domestic Demand
Brownouts , Blackouts and Increased Emissions from Using Cheaper / Dirtier Sources of Energy
Nov 6-18 , 2022 , concluded , one of the headline outcomes was reaching an agreement to compensate nations for loss and damage caused by climate change through establishing a fund .
The new Loss and Damage Fund ( LDF ) agreed upon at COP27 represented a long and hard-fought win for small and vulnerable nation-States and an essential step towards climate justice . Loss and damage , in its broadest definition , encompasses all the negative impacts of climate change , including extreme weather events like hurricanes and flooding and “ slow onset events ” like rising temperatures and ocean acidification .
The sources of funds to underwrite “ loss and damage ” was left for COP 28 to formulate and finalise .
Whilst the LDF would greatly assist emerging economies in the aftermath of a climate-related catastrophe , the focus of a balanced narrative at COP28 should be the need to avert further evolution of a probable Significant Future Energy Divide . This can only be achieved if the principles of the Energy Trilemma , as shown in Figure 3 , are respected and vigorously pursued .
For now , the foundation of the Divide has been laid and , if advanced further , will lead to painful outcomes for the poorest in the not-too-distant future . The least developed nations have contributed minimally to the climate change phenomenon being experienced today . Yet these very nations are also being asked to meet temperature targets to avert a global climate disaster urgently .
A PRACTICAL WAY AHEAD
To ensure long-term availability , legacy energy sources cannot be excluded from the energy mix . Instead , such sources should continue to be developed , prioritising decarbonising as much as practicable until projections for a net zero world need not rely on reductions in energy demand based on efficiencies and that defy economic theories such as the Jevons Effect . A sustainable financial future for emerging economies will not be defined by reactively securing compensation from the LDF .
Instead , it should be founded on proactively protecting adequate amounts of future energy supply to underpin stable and increasing levels of economic growth . Thus , emerging economies should use COP28 to ensure the principles balanced through the Energy Trilemma are strictly respected now and in the future so that everyone will have equal access in the future to what is likely to be a scarce resource . – @ Green
Dr Kenneth Pereira is managing director of Hibiscus Petroleum Bhd .
Figure 4 : A Probable Evolution into a Future Significant Energy Divide