The pace of the energy transition was discussed in Davos

Part of the sessions of the World Economic Forum (WEF) taking place these days in Davos is traditionally devoted to discussing the pace of the energy transition. This topic is also raised by the report “Accelerating a Just Transition: Foundations for Economic Equality” prepared by WEF experts. His focus is somewhat unusual – both the fight against “climate vulnerability” and the lack thereof increase economic inequality, both between and within countries.

What makes this formulation of the question unusual is that in recent years, a carbon-neutral future seems to have no alternative – and the energy transition is perceived not as a distant goal, but as a very specific task. Thus, in the new report by McKinsey & Co “Global Energy Prospects”, the emphasis is placed on the fact that not only developed but also developing economies will increasingly use renewable energy sources (RES) in the coming years (we are talking primarily about wind and solar generation ; see graph). The share of renewable energy sources in the global energy mix is ​​expected to “more than double” over the next 20 years. By 2030, they will provide 45–50% of generation, by 2050 – 65–85% (currently about 30%), McKinsey & Co predicts.

WEF experts, while generally agreeing with these guidelines, write about significant costs that are borne to varying degrees by developed and developing countries. For the latter, demand for energy will continue to grow, and investments ensuring the energy transition will not be enough to solve related problems, including large-scale restructuring of the labor market and retraining of employees. Inequality between countries will also increase due to different rates of energy transition.

WEF experts also do not expect economic justice in the domestic markets of developing countries: the energy transition will affect the availability of basic goods and services. Green energy will not become cheaper than traditional energy any time soon: in the near future, including due to macroeconomic instability, its prices will only rise. Experts do not give specific recommendations to countries, citing the fact that the description of problems and their discussion at the forum is only the beginning of a large campaign to find a solution.

Kristina Borovikova