The report on the state of the global energy transition, published by the World Economic Forum, shows that as the world faces its most severe energy crisis since the 1970s, urgent action is needed by both the private and public sectors to ensure a flexible transition. According to the Supporting, an Effective Energy Transition 2022 report, countries’ urgency to accelerate a holistic energy transition is reinforced by high fuel prices, commodity scarcity, insufficient progress in meeting climate goals, and slow progress in energy justice and access.
It details critical recommendations for governments, businesses, consumers, and other stakeholders on how to advance the energy transition, based on 10 years of the Energy Transition Index, an annual country benchmarking report produced in collaboration with Accenture.
To accelerate the transition to cleaner energy supply and demand, the report says, more countries must make binding climate commitments, establish long-term visions for local and regional energy systems, attract private sector investors for decarbonization projects, and help consumers and the workforce adapt.
Roberto Bocca, Head of Energy, Materials, and Infrastructure at the World Economic Forum, said: “Countries are at risk of future events that increase the disruption of their energy supply chains when the window to avert the worst consequences of climate change is rapidly closing. While there are difficult decisions to be made to align energy security, sustainability, and affordability imperatives in the short term, now is the time to act.” said.
The report also reveals the structural barriers to balancing energy affordability, security, and availability with sustainability. This is because of the post-pandemic increase in energy demand resulting from the war in Ukraine, fuel supply bottlenecks, inflationary pressures, and combined shocks to the energy system from restructured energy supply chains.
To meet this challenge, countries must pursue diversification on two fronts, not only in the local energy mix in the long run but also in the short run, considering their fuels and energy suppliers. The report states that 11 of 34 countries with advanced economies rely on just three trading partners for more than 70 percent of their fuel imports.
Espen Mehlum, Head of the World Economic Forum’s Energy, Materials and Infrastructure Benchmarking Program, said: “The current energy crisis demonstrates how important energy is to people and the economy. Tackling the structural risks that have become apparent as we build momentum in climate action is now critical. Success will largely depend on policy and investments. Prioritizing energy efficiency and increasing investment in clean energy infrastructure, renewables, clean hydrogen, and new nuclear capacity can strengthen the resilience of the energy system and will be a win-win for reducing emissions.” made the statement.