The global energy crisis provides a great opportunity for the developed world to reassess its fossil fuel dependence.
Much has changed in the ensuing year. Globally, coal consumption is expected to increase to 8 billion tons in 2022, matching the all-time peak reached in 2013. The European Union, amongst the strongest proponents of a coal phase-out, has increased its consumption of coal by 10 percent in the first six months of 2022. This is expected to increase further as winter approaches and natural gas prices remain high due to the supply squeeze brought about by the war in Ukraine. Europe is quickly facing the same problem that many developing countries face in transitioning out of coal—rapidly increasing demand combined with a lack of choices. If the Paris Goals are to be achieved, the Global North will have to account for the lessons learnt from the present energy crisis and increase its own commitment toward reducing dependence on all fossil fuels at COP27. The broader question to be raised here is why has the agenda focused on only coal. Given the stark predictions of the IPCC, surely any agreement should not only focus on coal alone but all forms of fossil fuel. This is a sticky issue for many countries in the Global North, particularly the US and Europe, since a large part of their power generation is dependent on oil and natural gas. For example, between 2005 and 2019, the share of coal in electricity generation in the US decreased from 50 percent to 23 percent. The decline has been compensated by a doubling of the share of natural gas to 38 percent in the same period. A similar situation can be seen in most of the European economies which have been pushing for a phasing out of coal, most have only a marginal share of coal in their electricity generation.
Europe is quickly facing the same problem that many developing countries face in transitioning out of coal—rapidly increasing demand combined with a lack of choices.
As per the IEA, achieving net zero emissions by 2050 will require natural gas consumption to decrease by 55 percent compared to present levels. This is in contrast to ‘business-as-usual’ estimates which suggest gas consumption will actually increase 38 percent by 2030. Clearly, the argument for utilising natural gas as a transition fuel, due to its slightly lower emissions, is questionable. Even if one were to consider the transition fuel argument, it will still be most relevant for the developing world where power demand is expected to increase rapidly and renewables alone may not be able to provide even the basic energy needs of a growing population. In either case, there is a strong argument for the developed world to relook at its dependency on natural gas. Furthermore, natural gas reserves are concentrated in a small set of countries, with the top five countries accounting for 50 percent of all identified natural gas reserves—Russia alone accounts for 25 percent. The present energy crisis has clearly shown that any disruption to natural gas supplies will necessitate a switch over to coal for much of the developed world. While a wartime situation is unique and unlikely to be repeated, existing geo-political tensions mean that future crises cannot be ruled out. Will the developed world continue to shift to coal every time there is a disruption in the natural gas markets? If the conversation on ending fossil fuels is to progress at Sharm-el-Sheikh, the developed world must reimagine its dependence on all fossil fuels rather than trying to push through agreements limited to coal alone. The ideal outcome would be a commitment to a global roadmap for ending fossil fuel usage, with the developing world weaning off faster to allow developing countries the carbon space it needs to achieve their development goals. This would be in keeping with the imperative of climate justice and ‘common but differentiated responsibilities.’ However, considering the present geo-political tensions and the trust deficit between the Global North and South, any such broad agreement seems unlikely. Instead, the developed world must aim to lay down strict timelines for reducing natural gas dependency within its own NDCs and other domestic commitments, such as the ‘Fit for 55’ package in the EU and the Inflation Reduction Act in the US. This would be a much better response to the Russian war than a renewed focus on drilling and construction of additional gas terminals as a means to reduce dependency on Russia, a proposition particularly attractive to the US oil and gas industry.
A similar situation can be seen in most of the European economies which have been pushing for a phasing out of coal, most have only a marginal share of coal in their electricity generation.
A clear commitment would translate into increased spending on renewable technologies, particularly battery storage systems needed to make wind and solar energy viable and green hydrogen. Increased innovation in these new technologies could lead to a trickle-down effect of benefits to the developing world which may not have the resources to invest in these technologies on the same scale. If the Global North can utilise the present crisis to show a new, more empathetic, leadership in the fight to end fossil fuels it could go a long way to increasing trust and set the scene for stronger actions in the overall climate diplomacy landscape.
A clear commitment would translate into increased spending on renewable technologies, particularly battery storage systems needed to make wind and solar energy viable and green hydrogen.
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Promit Mookherjee is an Associate Fellow at the Centre for Economy and Growth in Delhi. His primary research interests include sustainable mobility, techno-economics of low ...Read More +