Creating conditions for a globally just energy transition

How can the phasing out of fossil fuels be organised in a way that is fair to the Global North and the Global South? Or is it inevitable that developing countries will be unfairly disadvantaged because they lack the financial and technical means required for an energy transition? A new Policy Brief by the Institute for Advanced Studies (IASS) focuses on the risks faced by late-decarbonising countries and makes concrete proposals for cushioning their impacts.

In their Policy Brief “Countering the risk of an uneven low-carbon energy transition”, the authors Laima Eicke, Silvia Weko and Prof. Andreas Goldthau from the IASS write that meeting the technological and financial prerequisites for a global energy transition is crucial. Otherwise there is a danger that developing countries will not be able to make the change to more environmentally friendly energy systems and continue to lag behind in the energy transition – with far-reaching consequences for themselves and the rest of the world.

On the one hand, a rise in global carbon emissions will have a negative global effect. On the other, late-transitioning countries would be more susceptible to political instability and economic crisis.

For example, countries that are unable to phase out fossil fuels quickly enough are at risk of being excluded from international trade and value chains. This is because in a decarbonising global economy, the carbon content of products will become an important factor for determining market access, and latecomers risk being left behind. The resulting damage to their economies could be sustained.

COP25 as a stepping stone to a global energy transition strategy

To limit global warming to 1.5 degrees Celsius, all countries should have equal opportunities to decarbonise their economies – and consistent strategies are needed for that to happen.

As Laima Eicke, one of the study’s authors, points out: “If the gap between early- and late-decarbonising countries widens, so too might the potential for disagreements, further slowing the transition.”

To prevent that scenario, many countries need commitments for financial and technical assistance to speed up their energy transition processes to the degree required by the Paris Agreement.

The Meetings of the Marrakech Partnership for Global Climate Action, which includes representatives of various government levels as well as the private sector and investors, might open further space for these discussions at COP25.

Other international platforms, bilateral programmes, and private actors can also play an important role. Initiatives like the NDC Partnership highlight the potential for aligning the activities of multiple actors in specific country contexts.

Steps must also be taken to coordinate the principles and practices of financial actors across all countries. COP25 in Madrid could serve as a stepping stone to consistent strategies, which will be crucial for developing countries as they update their NDCs in 2020 and for efforts to close the ambition gap.

The authors’ three recommendations

Lead author Laima Eicke will present these recommendations at a side event at COP25 in Madrid on 3 December 2019:

1. Policy debates on ‘just transitions’ focus on the implications of phasing out fossil fuels from national energy mixes. Yet there are distributional effects of a global energy transition especially for developing countries that lack financial and technological means to transition, creating structural risks. Acknowledging this global dimension of just transitions at the UNFCCC may help to create alliances for climate action.

2. Technology transfer initiatives can accelerate the diffusion of low-carbon energy technologies. Yet only a third of existing initiatives focus on transferring skills, expertise and technology simultaneously. To ensure the success of a global energy transition, tech transfer must be targeted and comprehensive.

3. COP25 should coordinate a consistent strategy among financial actors to shift financial flows for energy transitions in the Global South. Common guidelines for long-term risk assessments and an exchange of best practices for capacity development could leverage ambition in the 2020 NDC updating processes.

Photo credit: UNFCCC

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