Current green transition solutions disregard social and political realities, both international and domestic

Source: The post is based on the article “Current green transition solutions disregard social and political realities, both international and domestic” published in The Indian Express on 4^th September 2023.

Syllabus: GS 3 – Environment – Clean Energy

Relevance: challenges in achieving green energy transition

News H.L. Mencken’s quote, “For every complex problem, there is an answer that is simple, clear, and wrong,” applies to the green energy transition. However, the solution provided for green energy transition falls short in addressing the issue effectively.

What solutions have been proposed for the green energy transition?

The solutions provided for the green transition include electrifying industrial and transportation systems with green energy, cutting generation and storage costs through technology, upgrading infrastructure, and implementing innovative financing.

However, these solutions may not be sufficient to prevent global temperatures from exceeding 2 degrees Celsius above pre-industrial levels because they overlook international dynamics and domestic political and social factors.

What are the international, social and political factors associated with shifting towards green energy transition?

First, global leaders recognize climate change as a global issue requiring global solutions, but governments are promoting resource nationalism by encouraging green energy investments within their borders.

For instance, the US Inflation Reduction Act of 2022 offers $365 billion in incentives, while Europe and India (PLI schemes) also have similar schemes.

Second, the green energy transition will have distributional consequences in the form of winners and losers. Those who lose their job may resist the transition, so governments need to make choices on how to distribute the costs and benefits.

Moreover, the lack of governance institutions in green energy transitions is also a major problem.

What factors contribute to the absence of governance institutions in the green energy transition?

First, the term “green energy transition” lacks clarity as it implies a complete shift from fossil fuels to clean energy, which is not the case. The transition will be gradual, with fossil fuels still prominent in the energy mix.

For instance, the shift from coal to oil in the 20th century provide that coal was not completely replaced.

Moreover, according to a recent IMF data, governments provided $1.5 trillion in fossil fuel subsidies in 2022.

Additionally, when factoring the hidden costs associated with air pollution and global warming, this support amounted to approximately 7.1% of global GDP. This justifies the dependence on fossil fuel for energy security and economic growth.

Second, a divide has emerged between China and the West due to their differing strengths. While China dominates the supply of essential minerals, the West dominates in advanced technology.

Both sides aim to avoid dependence while recognizing their interdependence. As a result, they are opting for a “de-risking” approach rather than complete “decoupling.”

Must Read: Financing the Green transition: initiative and challenges – Explained

What is the way ahead?

There’s an urgent need to expedite the energy transition by creating institutions that promote global cooperation, skill development, technology transfer, and conflict resolution.