The youngest leader to ever hold the post of Secretary-General of the
Then you will see how low it was.
As we turn our attention to the challenges of the 21st century, we do so at a historic moment in time. The COVID-19 pandemic has upended our personal sense of health and wellbeing and brought on a recession of global reach. The energy sector, in particular, has been hit hard.
Beyond the crises of the day, the looming challenge of the global energy transition remains. This article will attempt to lay out the case for optimism, while emphasizing the growing importance of using a System Value framework to chart a common path forward.
The Case for Optimism
Earlier this year, the
In 2019, the
In other words, the world's largest economy led the world with the largest emissions decline.
Moreover, in the same report, the IEA noted that the
IEA credits the
In 2020, market watchers expect global emissions will decline further, creating even keener interest in how we can continue to make progress in emission reductions, while doing so with greater dispatch.
The System Value Framework
The framework also moves analysis away from a political and commercial focus on single points of decision-making like the levelized cost of energy, as one example, to broader sets of considerations such as impacts on emissions, water, air quality, human health, economic prosperity and resilience.
Energy Diversification
According to the IEA, as much as 90% of global electricity demand growth through 2040 is expected to come from non-
Historically, states have acted rationally and sought to maximize their indigenous fuel sources to grow their economies. Often, those decisions privilege accessibility and lowest costs.
If the global community wants to alter the traditional cost-maximizing approach, it is critical that we acknowledge the importance of energy diversification. Every effort needs to be made to directly provide developing markets with new sources of energy and financial and technological support to create a broader loading order of energy choices without compromising a state's need for energy security.
Liquified natural gas (LNG) is a great example. I believe critical investments in LNG facilities will continue in key export markets, but it is arguably just as important that new investments in LNG regasification facilities occur to land LNG and diversify energy supplies in emerging markets.
By making natural gas, the lowest-carbon fossil fuel, more ubiquitous, we can support energy diversification and security, while recognizing the central role of natural gas and batteries in value-maximizing wind, solar and other intermittent resources.
Clean Transportation
In
There is growing recognition that shifting to clean transportation is critical. Last month, in a bold executive order,
Although other nations have set more aggressive or earlier clean transportation targets,
Energy Efficiency
Within the broader System Value framework, energy efficiency also scores high on the list of priorities. There is high value assigned to reducing per capita energy consumption. Most modern approaches are comprehensive, cutting across urban planning, mass transit, building design and construction to how we cook and heat water.
As we think about an economic recovery, well-designed programs that support energy efficiency also create jobs. In fact, the IEA has published a noteworthy Sustainable Recovery plan estimating that nearly 2 million jobs can be created annually from well-designed energy efficiency programs.
Leading with a System Value Framework
In times of great challenge, it is worth remembering that leadership is the most valuable commodity. At its core, whether in the political sphere or business, leadership comes down to setting priorities and allocating the right resources to those priorities.
Within a System Value framework, I believe there are three core areas of focus to guide our path forward. First, we must support the efforts of developing nations to diversify their energy choices to include a higher reliance on renewables with support from LNG and the latest advances in electric storage. Second, we must address emissions from transportation with greater ambition.
Lastly, energy efficiency must remain a priority. Avoiding energy demand is a far better outcome than incurring costs to limit the carbon content of energy and its related externalities.
Every decade, there is a 'step change' in technology and innovation. At
I hope that Hammarskjold is right and that one day, as an industry, we will look back on the mountain that we climbed together and then just maybe measure how low it really was.
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