The coronavirus pandemic risks cancelling out recent progress in transitioning to clean energy, with unprecedented falls in demand, price volatility and pressure to quickly mitigate socioeconomic costs placing the near-term trajectory of the transition in doubt, says the World Economic Forum.
The Forum’s latest report, Fostering Effective Energy Transition 2020, said policies, roadmaps and governance frameworks for energy transition at national, regional, and global levels need to be more robust and resilient against external shocks.
“The coronavirus pandemic offers an opportunity to consider unorthodox intervention in the energy markets and global collaboration to support a recovery that accelerates the energy transition once the acute crisis subsides,” said Roberto Bocca, Head of Energy and Materials, World Economic Forum, in a news release.
“This giant reset grants us the option to launch aggressive, forward-thinking and long-term strategies leading to a diversified, secure and reliable energy system that will ultimately support the future growth of the world economy in a sustainable and equitable way.”
The Forum said COVID-19 has forced companies across industries to adapt to operational disruption, changes in demand and new ways of working, and governments have introduced economic recovery packages to help mitigate these effects.
“If implemented with long-term strategies in mind, they could also accelerate the transition to clean energy, by helping countries scale their efforts towards sustainable and inclusive energy systems,” it said.
“The report draws on insights from Energy Transition Index (ETI) 2020, which benchmarks 115 economies on the current performance of their energy systems – across economic development and growth, environmental sustainability, and energy security and access indicators – and their readiness for transition to secure, sustainable, affordable, and inclusive energy systems.
“The results for 2020 show that 75 per cent of countries have improved their environmental sustainability, even as the global average score for this dimension remains the lowest of the three categories assessed. This progress is a result of multifaceted, incremental approaches, including pricing carbon, retiring coal plants ahead of schedule and redesigning electricity markets to integrate renewable energy sources.”
The report said Sweden (1) leads the ETI for the third consecutive year, followed by Switzerland (2) and Finland (3).
The report said the ETI scores for United States (32) and Canada (28), were either stagnant or declining.
“In the United States, the headwinds have been mostly related to policy environment, while for Canada . . . the challenges lie in balancing energy transition with economic growth given the role of energy sector in (its) economy.”
It said scores for Canada have declined since 2015.