Climate change, attributable to human activities, is the greatest challenge of this generation and the generations to come. Part 1 of the IPCC sixth assessment, on the basis of more than 100 publications, has concluded that human interventions have been the major reason for the climate adversities that we are exposed to.
Each year, climate change induced impacts are on the rise with increasing loss of lives and livelihoods. Of course, awareness on combating climate change has been on the increasing trajectory but we still see dilly-dally approaches in fighting climate change.
There are also visible challenges, as more energy production is necessary to ensure 100% electricity access across the globe and meet the insatiable demand of the people. Despite the compatibility of renewable energies with respect to most of the fossil fuels, clean energy transition is still a far cry. Energy pricing anomalies make the problem even worse.
The 26th Conference of the Parties (COP26), held in November 2021, albeit not being appreciated by all the stakeholders for the final outcomes, has delivered on some important areas. Fossil fuel subsidies have been termed as inefficient and rightly so.
To some people, the question might be what do "inefficient fossil fuel subsidies" mean? Fossil fuel subsidies create price distortion of energies – for instance, fossil fuels are artificially kept low when renewable energies are mostly competitive in the market, affecting the desired level of clean energy transition.
Furthermore, when millions of people die in the world due to pollution linked to fossil fuel combustion, subsidising fossil fuels is inefficient as the external cost is being borne by the society. The call from the parties to the COP to phase out inefficient fossil fuel subsidies is, therefore, expected to be a boost, both for renewable energy and energy efficiency.
Much has been said about the coal phase out in the building up of the COP26 and the expectation was high that a concurrence would be possible to reach at the conference. The terminology "coal phase out" was on the COP26 document until the very last moment but has later been watered down as "coal phase down", perhaps because of the pressure from the countries that foresee huge coal dependence in their energy mixes in the coming years. Yet, it is a success, to say the least, and there would be pressure on the coal dependent countries to minimise their coal consumption sooner rather than later. It will, certainly, give the market signal for enhanced use of renewable based energy sources in the world.
Now, there is more clarity on the Article 6 of the Paris Agreement with the integration of Clean Development Mechanism (CDM) projects. A share from the proceeds of carbon trading under Article 6 would be utilized for adaptation.
Another important dimension is that adaptation has been termed as equally important as mitigation. Parties to the COP26 have agreed that enhanced finance would be key to spearhead climate actions and the promised $100 billion from the developed countries for supporting the poor and developing nations shall be urgently fulfilled.
To conclude, the competitiveness of clean energy would automatically influence a certain level of transition but the level we need to reach net zero emission by 2050 would necessitate huge investment. This would also require addressing energy price distortions arising from inefficient fossil fuel subsidies. Likewise, "coal phase down" means a lot too.
Notably, the International Energy Agency (IEA) has concluded that renewable energy capacity should be enhanced by a blistering factor of four, compared to the 2019 level, to attain net zero emission.
On a closer inspection, just on the energy front, huge and concerted efforts are imperative. This is in no way possible without the policy traction at the country levels and appropriate support from the developed nations targeted to the poor countries in terms of finance, technology transfer and capacity development.
The giant banks that are notorious for pumping finance to the fossil fuel sector need to follow suit as well. All said and done, it is necessary that we walk the talk. The success of the COP26 and/or the Paris Agreement could only be measured by the actions to be undertaken in 2022 and beyond.
Unless actions are taken on the ground, it is inefficient to spend so much time and resources to attend COP each year by so many people from all the countries to a foreign land to merely strike deals or garner agreements on the need for enhanced ambition/action or finalise rules/processes.
Shafiqul Alam is an environmental economist