Factor

Energy markets are not changing fast enough to avert climate change

28 March 2018 | Mitigation

A report published by the World Economic Forum (WEF) has revealed that while most countries are making some progress to shift to more sustainable energy systems, the pace is insufficient to keep climate change in check.

Asian countries rank poorly in the Energy Transition Index (ETI) of the study, with Singapore leading the region in 12th position, Malaysia in 15th, but most South and Southeast Asian countries languishing from 50th to 70th position.

Developing countries in Asia ranked by their existing energy systems and their ability to transition to a low-carbon energy future. Image: World Economic Forum

The ETI ranks countries based on the current performance of their energy system on three fronts – energy security and access, the environmental sustainability of the system, and the potential for inclusive economic growth and development. It also ranks a country’s potential to transition to a low-carbon energy future.

Among those three dimensions, environmental sustainability showed the lowest performance and improvement rates.

Between 2013 and 2018, 45 countries including Japan, China and India saw decreasing scores for environmental sustainability. This is due to rising air pollution and particulate emissions in more than half of the countries, causing around six million premature deaths globally each year, the report noted.

Energy intensity—a measure of the energy efficiency of a country’s economy—has improved and driven progress in environmental sustainability. Decreasing energy intensity and improving efficiency are two of the key levers to achieve the goals of the Paris climate agreement, reported WEF.

However, the current energy productivity improvement rate of 1.8 per cent per annum is falling short. The Energy Transitions Commission estimated that a reduction rate of three per cent per annum is required to limit global warming to below 2°C.

Energy access for all

Security and access remains the area with the widest disparity between highest and lowest performing countries.

Almost all countries without universal electricity access have seen progress. In absolute terms, however, the number of people without access to electricity is not declining quickly enough to meet the UN objective of universal electrification by 2030. There are still one billion people globally living without electricity.

Additionally, household electricity prices have been rising in real terms since 2013 in more than one half of countries globally, despite an overall fall in primary fuel prices. 

The report also identified countries that demonstrate above average potential to transition to a low-carbon energy future despite a low ranking in the ETI. These countries included Asian economic powerhouses China and India. 

China

China has the potential to leapfrog to a more sustainable energy system because of the government’s push to replace petrol vehicles with electric ones and a political commitment to address environmental challenges, including plans to introduce a carbon trading market.

China is already investing over $100 billion domestically on renewables every year, and has become the world’s largest investor in renewable energy overseas, strengthening its position among the leading countries in renewable energy supply chains.

 

 

Source: Eco-business