Reactions to emissions agreements reached at COP26 earlier this month were decidedly mixed. But one theme that emerged clearly from the dialogue surrounding the negotiations was the need for a just and equitable energy transition.
Developing countries that rely upon, or have been hoping to exploit, endowments of fossil fuels are in a unique predicament. They face the prospect of stranded assets and are caught between the global need to reduce fossil fuel consumption and their ambitions to economically develop, especially amid the turmoil wrought by the coronavirus pandemic. “In this challenging context, developing new producer countries are trying to figure out how to finance both their development and energy transition ambitions,” said NRGI’s Amir Shafaie as he moderated an event convened by NRGI, the Commonwealth Secretariat and the New Producers Group.
And in her intervention at Carbon Tracker’s “Energy Transition and the Far-Reaching Implications,” NRGI’s Nafi Chinery observed that “countries like Ghana need climate finance for their transition, but also a plan for how to spend transparently and based on stakeholder consultation and consensus.”
(This was one of three steps to a just and equitable energy transition outlined during COP by NRGI’s Suneeta Kaimal and Aaron Sayne, who also called for a focus on anticorruption in critical mineral supply chains. Hear more from Kaimal on the energy transition in her recent podcast with Critical Resource.)
Chinery suggested that “the Ghanaian government needs a comprehensive outlook on energy transition that accounts for all risks and opportunities. Earlier this year the government proposed borrowing up to $1.6 billion to buy back offshore oil blocks, but this was based on a poor valuation and was extremely risky.”
Some saw previous COPs’ focus on the consumption of fossil fuels as lopsided. “We should have put fossil fuel supply on the table back in Rio, instead of focusing solely on emissions,” said Niclas Hallstrom of the What Next Forum. At the same event, Carbon Tracker’s Mike Coffin warned that “more than 400 million people live in countries with more than 20 percent of government revenue at risk due to oil investment. Oil-dependent countries must diversify their economies immediately. And other countries should not become petrostates; they must not double down.”
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