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

Aligning Interests or Precipitating Energy Transition 1 Year 2023 3 © 2023 Global Journals Global Journal of Science Frontier Research Volume XXIII Issue ersion I VI ( H ) 6 Investment in traditional energy for transition, HE Suhail Mohamed Al Mzrouei, The Banker, Oct. 22,2022 https://www.thebanker.Com/ content/search/(offset)/180?SearchText=October+2022&sortBy=publ ished&SearchType=articles. So much of the climate change debate is deeply emotional and inflammatory, rather than open- minded and probing. The point of this paper isn’t to take sides in what often are quite often are complex disputes. The lack of progress should in itself be a warning that we are on a trajectory that is far from decisively correct. Looking towards the future, all indications are that in the 21 st century the world will face twin energy- related threats: that of not having adequate and secure energy supplies at affordable prices and that of environmental harm caused by consuming too much energy in inappropriat e ways. Responding to either of these threats could be relatively straightforward; however, a solution to both simultaneously is one of the great challenges facing this century, and will require particular attention to the following: First: With global energy demand increases, calling for a cut in consumption is not a viable option, as it would undermine much needed economic development, particularly in emerging economies. Inevitably, fossil fuels have an important role to play as back-ups of renewables, to cover for shortfalls resulting from their reliance on natural conditions (e.g., solar during evenings or poor weather conditions, or eolian when wind conditions are insufficient). Second: The path cannot be limited to renewable energies per se, but the reduction of carbon emissions with a variety of technologies, the widespread deployment of carbon capture, use and storage, and This will facilitate the introduction of more advanced technologies in new plants, which are less cumbersome than conversion or decomissioning of existing ones, improving the impact on the global energy matrix. However, the obsession with restricting hydrocarbons and consequent insufficient investment in conventional energy (to overcome limitations of renewable energies that depend on climatic factors requiring support from traditional sources), has damaged energy security and a transition that responds to the greater demand 6 III. C onclusion: the ay F orward . Decarbonizing the energy sector and simultaneously meeting rapidly expanding energy demand is perhaps the most important challenge facing global development. As new technologies develop and become more competitive, a greater share of increased power demand will be supplied by renewables, together with proper backups from traditional energy sources, thereby providing a more resilient and balanced energy matrix: “If we don’t change our direction, we’re likely to end up where we’re headed” Chinese proverb. W the alignment of interests through pricing and taxation policies that facilitate the mobilization resources to investments required by the transition 7 . Third: An integrated approach will be inevitable, as investments must respond to environmental goals, as much as affordability and reliability, under volatile supply, demand and financial markets conditions. This will require a balanced approach that responds to tradeoffs among sources of energy supply, and ensures a flexible supply chain response with resilient cost efficiency. Fourth: This, requires, however, defraying the incremental costs of tackling climate change in the order of 1-2 % of GDP, which makes the entire issue politically charged, particularly which countries and segments of the population need to defray such costs, and how the inevitable risks are going to be managed. As both the scale and manner of mobilizing resources have failed to respond in a manner to generate tangible progress, the time has come to reset the role that multilaterals (particularly the World Bank and the IMF), to ensure that resources are mobilized in magnitudes and with proper policy frameworks to fund incremental investments and ensure their long- term sustainability. All said, the critical question is not to try and pick which technology or top-down approach, which all too often have proven to be ineffective. Given the uncertainties, technological developments that still need to take place, and an unstable and unpredictable future, the outcomes will hinge on how we put in place systems to ensure that the creativity of the market develops and allocates resources to those technologies and approaches that move the energy mix in the right direction at the lowest cost. Any regulatory process should be as supportive as possible, and be within the institutional capacities of the country concerned. In doing so, every effort should be made to generate incentives towards managing sustainability, rather than mere compliance, or even worse “greenwashing”, gaming the system, and consequent missed opportunities for innovation, efficiencies, and social benefits. 7 International Energy Agency; Energy Outlook 2023 https://www. eiu.com/n/campaigns/energy-in2023/?utm_source=google&utm_med ium=ppc&utm_campaign=industries-in2023&gclid=EAIaIQobChMI8 qayjZvU_AIVChvUAR3pCweoEAAYAiAAEgJr7_D_BwE.