The World Energy Council has identified five imperative actions that the energy sector needs to implement in order to mitigate against dramatic changes predicted in international demand in 2050.
The World Energy Council and its project partner, global management consulting firm project partner Oliver Wyman, along with the Global Risk Centre of its parent Marsh & McLennan Companies, launched the seventh Trilemma Report: ‘Priority actions on climate change and how to balance the energy trilemma’ this week in Merida, Mexico.
The report focuses on energy security, energy equity and environmental sustainability with contributions from both the private sector (60%) and the public sector (40%).
The South African National Energy Association (SANEA) said in a statement that a clearly defined global climate change target would develop confidence in the industry and finance sector resulting in greater investment.
SANEA claims that an increase in investment will facilitate the transition to a sustainable energy future.
South Africa has already seen such investment through the Department of Energy’s Renewable Energy Independent Power Producer Procurement Programme which has already attracted an estimated ZAR170 billion ($14 billion) of private capital investment.
Executive chair of the World Energy Trilemma Joan MacNaughton commented: “The energy industry believes the time is ripe for stronger action on climate change, and it is more than ready to play its full part, building on the examples of leadership which some businesses are already showing.”
He added: “Our findings show that there is a real thirst for vigorous implementation of strong commitments – the focus now needs to move from negotiation to action. Unless this happens, it will become increasingly difficult to deliver across the three trilemma goals of energy security, energy equity and environmental sustainability. As the energy industry is telling us, it is now time to get something done.”
SANEA highlighted five policy enablers which the report identifies that are key to the successful transition to a low carbon energy system:
- Remove barriers to trade and enable technology transfer, including tariffs on environmental goods and services, and protecting intellectual property rights.
- Set a carbon price to level the playing field and redirect investment towards low-carbon solutions.
- Provide the right policy signals to scale up investment, accompanied by a portfolio of bankable projects to attract more private capital.
- Place greater emphasis on demand management including increasing energy efficiency across all sectors covering residential, commercial, industrial and transport.
- Prioritise and build platforms for innovation and RD&D, principally in the investment case for new technologies, as well as a new era of collaboration between the public and private sectors.
Alex Wittenberg, Oliver Wyman Partner and executive director, Marsh & McLennan Global Risk Center, commented: “Transitions in the energy sector and the evolution in energy supply and demand will have huge impacts across all economic sectors.
“Companies have new and evolving choices on how they source and use energy now and in the decades to come and policy clarity is essential to accelerate the pace of transition.”
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