Broad support for decarbonisation endured in a difficult year
Despite US withdrawal from climate talks, global energy transition thrives on tech advances, renewables, and international collaboration, driving decarbonization.
US withdrawal from the climate talks has definitely led to disruption in the global markets on the issue of energy transition. But contemporary energy transition now rests on a foundation broader than the actions of any single nation. Advances in technology, falling costs, and robust demand is leading to rise in electrification and renewables in both advanced and emerging economies, says Pim Valdre, head of climate and nature economy, World Economic Forum. This may lead to success at COP30 in an otherwise difficult year.
Excerpts from interview:
1. After the US withdrawal from the Paris Agreement, how is industry responding to climate goals? Are there notable shifts in direction?
The global context that followed the US´s announcement of the withdrawal from the Paris Agreement was a demonstration of both the complexity and resilience of global climate action. While the move prompted reflection internationally on the future for global climate collaboration, the broad support for decarbonisation endured, driven by an increasingly diverse coalition of businesses, governments, and civil society actors.
More than 100 countries have reduced fossil-fuel imports as renewables become more competitive, generating an estimated $1.3 trillion in savings since 2010. The International Energy Agency anticipates a rapid acceleration of this trend through the decade. In practice, sectors ranging from energy and technology to industry have maintained their ambitions, with some even raising them and setting tougher emissions targets and investing in innovation and transparency.
Business initiatives have played an influential role. Ahead of COP30, for example, the Forum’s Alliance of CEO Climate Leaders published an open letter calling for policy acceleration and highlighting the economic opportunity of climate action. International cooperation, facilitated by a range of platforms and knowledge-sharing efforts, has made the low-carbon transition less the work of any one country, and more a hallmark of broad-based economic progress. Moreover, the Alliance of CEO Climate Leaders announced that members reduced their aggregate absolute emissions by 12% between 2019 and 2023, while growing revenues by 20% in the same period – demonstrating that there is no contradiction between effective decarbonisation and strong economic performance.
2. How are disruptive tariff policies influencing markets and the energy transition?
Trade tensions, tariffs, and regulatory fragmentation have complicated the global landscape for clean technology and energy. These developments have disrupted supply chains, increased costs, and exposed sectors dependent on critical minerals to new risks. These pressures, however, are also catalysing a strategic shift in both industry and government thinking.
Some economies have responded by accelerating investment in domestic capacity. In the US, the rapid expansion of clean-tech manufacturing is paired with renewed focus on critical-mineral supply; Latin America has seen new frameworks in responsible mining. In Asia-Pacific, projects such as the Asean Power Grid and the rise of cross-border green hydrogen initiatives are providing regional alternatives to volatile global markets.
Collaborative mechanisms are reinforcing this progress. The Forum’s First Movers Coalition, for instance, helps aggregate global demand for green technologies, while corporate advances in circular supply chains and battery recycling are becoming more commonplace.
While this phase of uncertainty presents strategic challenges for the private sector, it has also catalysed the emergence of new alliances and regional and global value chains. Spurred by both adversity and opportunity, the push for green growth and the energy transition endures.
3. How are industry leaders embedding clean technology, electrification, and renewables – and what drives today’s investment and innovation?
The integration of clean technologies, electrification, and renewables now shapes an increasing part of the industrial landscape. For the first time, global clean energy investment exceeded $2 trillion in 2024 — $800 billion more than fossil fuels, with renewables now the primary source of new electricity generation worldwide.
Leading companies have adopted advanced grid management and digital optimisation, typically using AI and data analytics, often with partners. In harder-to-abate sectors, the Forum’s Transitioning Industrial Clusters initiative is working in regions from Europe to India to bring collaborative approaches to hydrogen and green steel.
The upshot: technological insight and pragmatic alliances are now central to the green transition, with solutions scaled by investors, policymakers, and firm-level leadership alike.
4. How are Indian companies managing the transition and the path to net zero?
India’s corporate climate landscape is marked by both momentum and complexity. Roughly 130 Indian firms have now validated net zero targets under the Science Based Targets initiative, part of a broader global trend that sees a third of the world’s largest public companies pledging alignment with climate goals. Yet progress is uneven: sectors such as power, cement, and materials remain challenging, with only one in ten firms committing to net zero, illustrating the capital intensity and technical barriers to rapid decarbonisation.
Several Indian companies, however, have quietly assumed leadership roles. Tata Steel and Mahindra, both part of global CEO alliances, are advancing Scope 3 emissions reduction through supplier engagement, renewables procurement, and more sustainable supply chain management. Their focus includes investments in energy efficiency, electrification, and green fuels, establishing them as pioneers among the so-called hard-to-abate sectors.
ReNew, a leading renewables and decarbonisation solutions company, has maintained carbon neutrality for its direct operations for two years.
Such efforts underscore a pattern across Indian industry: while the road to net zero is far from straightforward, strategic investments, cross-sector alliances, and continual innovation are providing a model for pragmatic, scalable progress.
5. Do you feel that the US’s push towards fossil fuels could destabilise the energy transition?
Energy policy in major economies inevitably shapes global markets. Yet the contemporary energy transition now rests on a foundation broader than the actions of any single nation. Advances in technology, falling costs, and robust demand, from private investors to consumers, underpin the continued rise of renewables, electrification, and emissions reduction, in both advanced and emerging economies.
Coalitions formed by business, investors, and policymakers continue to reinforce this momentum. Over 100 countries have cut fossil-fuel imports, saving more than $1.3 trillion since 2010, while investment in renewables and battery storage now exceeds spending on fossil fuel infrastructure by a significant margin.
Long-term investment cycles and diverse energy portfolios have increased the system’s resilience to short-term political shifts. In practice, the net-zero transition proceeds across most regions, supported by regional leadership and a proliferation of in-country and transboundary partnerships. Progress towards a cleaner, more resilient energy system is now an international project, shaped as much by shared ambition and innovation as by local priorities.
6. How will the boom in AI data centres be fuelled, and what will its impact be?
AI data centres are increasingly significant in global electricity demand, projected to account for about 10% of power demand growth by 2030. Their expansion raises questions about how digital infrastructure can be reconciled with climate goals.
The industry response is, in part, to invest in renewable energy supplies and in AI-powered grid optimisation, sometimes in partnership with utilities and national governments.
Partnerships, both public and private, are accelerating efforts to decarbonise energy supply. Some companies are pursuing joint investment in advanced nuclear, large-scale solar, and grid balancing, while industry standards are emerging to encourage transparency and data-sharing in real-time energy use.
If thoughtfully managed, the boom in AI and digital infrastructure could serve as a proving ground for deeper grid flexibility and faster decarbonisation, but this requires a dedicated strategy to integrate nature and climate from the get-go of business strategies.
