Global Journal of Science Frontier Research, H: Environment & Earth Science, Volume 23 Issue 1

Aligning Interests or Precipitating Energy Transition Miguel Schloss Abstract- “History does not repeat but it does rhyme” Tyler Cowen A lot has been debated about the effects of carbon emissions and their impact climate change. Of all the issues that need to be addressed, the one that stands out refers to the power sector, which absorbs more primary energy than any other sector, and accounts for anywhere between a third and half of carbon emissions worldwide. In recent years, an increasing consensus has emerged that there is a need to reverse these emissions to prevent global average atmospheric from generating further temperature increases. To this end, 195 countries entered into an international agreement in Paris to limit temperature increase 1.5 degrees Centigrade of pre-industrial levels by mid-century – but there is still a long way to go to cap global warming at this level, and thus no basis for complacence. Actually, progress towards this aim remained negligible over the last 20 years, with marginal changes in CO2 emissions. This paper does not address the wide range of issues, such as what to do on research and development of new technologies, hard-to-abate sectors like mining, shipping, etc. Instead, it focuses on a simmering (and at times ideological) debate on how to respond to this lack of progress – i.e., by instituting stronger environment regulations and associated monitoring to force enterprises to set up plans and investments aimed at reducing emissions, or enhancing enabling conditions for investment environment through pricing and taxation policies to facilitate financial and human resource mobilization to deal with the issue. This article is focused on this apparent dilemma to enhance progress and results in climate change actions. As there are few precedents in this emerging area, this article is based on benchmark analysis the author has conducted to assist several Governments in designing policies to deal with the emerging issues that climate change is posing. Keywords: paris agreement, climate change, decarbonization, fossil fuels, renewables, regulatory controls, enabling conditions. Author: Aligning interests or precipitating energy transition Miguel Schloss. President of Surinvest Ltda.; member of Bretton Woods Committee (*). Former Executive Director of Transparency International; and Director of Corporative Planning of the World Bank (*) World Bank and IMF expert advisory committee for emerging issues. e-mail: schlossmiguel45@gmail.com I. I ntroduction: C urrent I ssues “Eternity is a very long time, particularly towards the end”, Woody Allen he Paris Agreement on climate change aims at limiting global warming to no more than 1.5°C of pre-industrial levels and a decarbonized economy by mid-centur y 1 The crisis triggered in Europe by the suspension of Russian gas supply, together with decisions to curb production of hydrocarbons, illustrate the disconnect of the actions taken with geopolitical realities. These have triggered price increases to record levels, and a gap between the goals and achievements of the Paris agreements. A transition towards the agreed objectives will demand a decidedly more strategic and coherent approach . This implies investments of at least US$16.5 trillion, and a profound transformation in production and transportation practices, investments in renewable energy, and other actions never seen to date. 2 Any effort of this nature will require important human and financial resources to make progress within . This will require special attention to coal- dependent economies such as India and South Africa – which generate more than 70 and 85% of their electricity, respectively, from low cost coal, with serious social and economic repercussions that will need more nuanced approaches to transition than those applied to date. Likewise, focused efforts will be required in countries with important generation facilities or in energy-intensive and harder-to-abate sectors that are difficult to decarbonize, such as mining and extractive industries. 1 United Nations Framework Convention on Climate Change (FCC – Conference of the Parties – Paris, France (Dec. 2015). https://unfccc. int/process-and-meetings/the-paris-agreement/the-paris- agreement. 2 Mapping Carbon Neutrality in Uncharted Territory, Miguel Schloss; Generis Publishing, 2022. https://www.generis-publishing.com/book. php? title=mapping-carbon-neutrality-in-uncharted- territory-521. T 1 Year 2023 1 © 2023 Global Journals Global Journal of Science Frontier Research Volume XXIII Issue ersion I VI ( H ) At stake is the need to assure continued economic development, and assuring the associated improvements in standards of living. Over the decades, growth has been propelled by massive expansion of energy demand, powered by hydrocarbons that brought about increases in CO2 emissions.