The World Economic Forum (WEF), a Swiss non-profit organization known for its commitment to shaping global, regional, and industry agendas, recently released a report titled “Fostering Effective Energy Transition 2022”. The WEF is recognized by the Swiss authorities as the international institution for public-private cooperation and continually publishes significant reports such as the Energy Transition Index and the Global Competitiveness Report. Founded in 1971 and headquartered in Geneva, Switzerland, it remains under the stewardship of Founder and Executive Chairman, Klaus Schwab.
The Challenge in Energy Transition
According to the report, the pace of energy transition does not align with the increasing urgency of climate change. The post-pandemic surge in energy demand, coupled with fuel supply bottlenecks, inflationary pressures, and reconfiguration of energy supply chains due to the war in Ukraine, have further complicated the transition. The simultaneous challenges of high energy prices, potential energy supply shortages, and soaring demand for fossil fuels are affecting energy affordability, security, and sustainability. Access to affordable energy supply has become a crucial factor in ensuring a just transition.
In addition, industrial activities contribute to over 30% of human-induced emissions, yet many industries struggle to decarbonize. In terms of fuel imports, 11 out of 34 advanced economies rely on just three trade partners for over 70% of their fuel imports.
Needed: Climate Commitments and Long-Term Visions
The report strongly recommends binding climate commitments, long-term visions for both domestic and regional energy systems, attracting private sector investors for decarbonization projects, and assisting consumers and the workforce in managing these changes.
A Holistic Approach to Transition Imperatives
What is crucial now is the development of adequate enablers and support mechanisms to maintain the momentum of energy transition despite these turbulent times. A comprehensive approach is needed that concurrently addresses the three transition imperatives: energy affordability, availability, and sustainability.
Incentivizing Efficient Consumption and Behavioral Intervention
The report calls for actions to protect the most vulnerable with appropriate support measures that incentivize efficient energy consumption. Fourth Industrial Revolution technologies can assist households and businesses alike in making this transition.
Securing Energy Diversity and Security
The dual diversification of supply source and supply mix can significantly strengthen a country’s energy security. Short-term diversification of import partners and long-term diversification of domestic energy portfolio with low-carbon alternatives can yield significant benefits.
Pairing Supply-Side Interventions with Demand-Side Efficiencies
The current energy market volatility and security constraints offer an opportunity to fast-track the transition by boosting demand for clean energy and fostering more efficient energy consumption from both industrial and end consumers.
Regulatory Frameworks for Action and Investment
Regulatory frameworks must be strengthened to drive necessary actions and investments. Anchoring climate commitments into legally binding frameworks not only ensures endurance through political cycles, but also provides enforcement mechanisms to keep implementation efforts on track.
Encouraging Clean Demand
Clean demand signals could be a crucial turning point in scaling projects and investments required for developing low-emission industries. This would ensure a more sustainable and affordable energy sector for all.
World Economic Forum and Global Gender Gap Index
The WEF is responsible for issuing the ‘Global Gender Gap Index’ ranking, a measure that ranks countries based on the calculated gender gap in health, education, economy, and politics. The 2021 edition examined skills gender gaps related to Artificial Intelligence (AI) as well. India was ranked 140th in the 2021 WEF Gender Gap Index.
‘Ease of Doing Business Index’ and its Relation to India
The ‘Ease of Doing Business Index, which provides objective measures of business regulations and their enforcement across economies and selected cities at the sub-national and regional level, declared India as 63rd in its latest report. It is prepared and released by the World Bank and measures regulations applying to domestic small and medium-sized companies throughout their lifecycle.