‘Fossil fuels are a dead end’: UN chief emphasises renewable energy projects
Warning that the world was heading for a disaster because action on curbing greenhouse gas emissions is very slow, Guterres said private and public investments in renewable energy must triple to at least $4 trillion dollars a year
United Nations general secretary Antonio Guterres, noting the global energy crises which prompted large economies to open new oil and gas fields, has proposed five critical actions to jump-start the transition to renewable energy.
Guterres’s statement came even as the World Meteorological Organisation – the UN agency which covers weather, climate and water resources – launched its State of the Climate report on Tuesday.
“Today’s State of the Climate report is a dismal litany of humanity’s failure to tackle climate disruption. Sea level rise, ocean heat, greenhouse gas concentrations, and ocean acidification set alarming new records in 2021. The global energy system is broken and bringing us ever closer to climate catastrophe. Fossil fuels are a dead end — environmentally and economically. The war in Ukraine and its immediate effects on energy prices is yet another wake-up call. The only sustainable future is a renewable one. We must end fossil fuel pollution and accelerate the renewable energy transition, before we incinerate our only home,” the UN chief said.
The WMO report was released ahead of the World Economic Forum 2022 Annual Meeting scheduled to be held from May 22 to 26 and is likely to have participation from 2,000 leaders and experts under the theme ‘History at a Turning Point: Government Policies and Business Strategies’. Mobilizing public-private action to deliver on 2030 and 2050 global climate goals is a key topic on the agenda.
Warning that the world was heading for a disaster because action on curbing greenhouse gas emissions is very slow, Guterres said private and public investments in renewable energy must triple to at least $4 trillion dollars a year.
The five actions that Guterres proposed are:
1. Renewable energy technologies, such as battery storage, must be treated as essential and freely-available global public goods by addressing intellectual property rights restrictions.
2. Scale up and diversify the supply of critical components and raw materials for renewable energy technologies. Today’s supply chains for renewable energy technology and raw materials are concentrated in a handful of countries, he said.
3. Governments must build frameworks and reform bureaucracies to level the playing field for renewables by removing red tape. In many countries, these systems still favour deadly fossil fuels, he said.
4. Governments must shift subsidies away from fossil fuels. Every minute of every day, coal, oil and gas receive roughly $11 million dollars in subsidies.
5. Private and public investments in renewable energy must triple to at least $4 trillion dollars a year.
Some of these actions are likely to be critical for India, particularly on financing of renewable energy projects.
Guterres said, “For solar and wind power, upfront payments account for 80% of lifetime costs. That means big investments now will reap big rewards for years to come. But some developing countries pay seven times more in financing costs than developed countries. We need blended finance that provides the necessary structures to close existing funding gaps and unlock the trillions held by private actors.”
The UN chief called on management and shareholders of multilateral development banks and development finance institutions to take responsibility and be held accountable for not investing in renewable energy.
Some senior UN officials during a background briefing said such a coalition can be taken forward by the G20 countries. Following the Ukraine crisis, there has been a disruption of global energy supply and demand. This has also led to sky-rocketing fuel prices and countries opening up new oil and gas fields to meet demand which is likely to lead to locking in of fossil fuel-based projects for decades.
“Certain investments made by major economies recently will definitely prolong the life of fossil fuels. Especially, opening up and exploration of new oil and gas fields. It takes a decade to develop these fields and then the investment is not for the next 10 to 20 years but for the long term. The commitments made by countries in Glasgow will lead to a 14% increase in emissions by 2030 over 2010 levels instead of falling by 40% to meet the 1.5°C goal. The window on the 1.5°C goal is fast closing. This is one of the main reasons for the UN Secretary General to propose 5 critical actions to jumpstart the renewable energy transition,” said a senior UN official during the background briefing on Tuesday.
On May 13, Fatih Birol, executive director of the International Energy Agency, said: “We understand why some countries and companies are looking to move ahead with the exploration and approval of large longer-term supply projects. But it typically takes many years for such projects to start producing, so they are not a good match for our immediate energy security needs. Long-lived assets also carry a dual risk of locking in fossil fuel use that would prevent the world from meeting its climate goals – or of failing to recover their upfront development costs if the world is successful in bringing down fossil demand quickly enough to reach net zero by mid-century.”
The US Energy Information Administration said on May 5 that in response to higher crude oil prices, financial results for 42 US exploration and production (E&P) companies showed large increases in both cash from operations and capital expenditures in the fourth quarter of 2021.
“We need a massive surge in investments in renewables and renewable technologies to overcome the climate crisis, and the current energy crisis. In fact, the turmoil is another nudge to the world to accelerate energy transition efforts. There is no better solution to achieve energy security at present other than the solar and wind energy solutions, coupled with storage systems such as batteries and pumps. Along with the enhancement in capital investments, it is also imperative to ensure equitable distribution of capital investments to stimulate growth in renewables,” Ajay Mathur, director general of the International Solar Alliance said in a statement.
“International Solar Alliance has been working on bringing innovative instruments such as Blended Finance Risk Mitigation Facility to ensure risk balancing and attracting private capital to flow into underserved markets. The five critical actions highlighted by the Secretary General are effective tools for moving towards a greener and energy secure future. Countries must collectively undertake these and channelize efforts towards resolving issues,” Mathur said.