Attention Paradox
You have likely encountered countless energy and climate outlooks from universities and think tanks. While they mean well, these reports can feel overwhelming, repetitive, and sometimes misleading. They create scenarios, make assumptions, crunch numbers, extrapolate and tell you stories – designed to persuade action, instill hope, or create a sense of urgency. However, these projections can still be biased—whether intentionally or unintentionally—shaped by the authors’ or institutions’ agendas, the complexities of modelling, and the tendency to project a preferred or assumed future. It’s important to look beyond the numbers and scores and focus on understanding the bigger trends.
And here’s the paradox: even though these projections sound alarming, they only capture our attention for a moment. Then the world moves on to other headlines: the Israel-Gaza conflict, rising inflation, the US/EU-China trade war, or Prince William dancing to Taylor Swift’s ‘Shake It Off.’ Without sustained attention and action, these warnings take a back seat in the hustle and bustle of life.
Stalling Global Energy Transition: WEF’s Warning
Last week we got another reminder. The World Economic Forum and Accenture warned us that the global energy transition is slowing down, even though many countries have hit record-high Energy Transition Index (ETI) scores. Think of the ETI like a fitness test—it shows how ready (fit) a country is for a sustainable energy transition. But just like being physically fit doesn’t mean you can scale Everest without issues, a high ETI score doesn’t guarantee a smooth and just transition from fossil fuelled world to a cleaner one. And it’s equally possible that you can strategically work to get a better score for yourself, but the real-world challenges could still be tough or even tougher.
While the world technically seems to know how to achieve net zero by mid-century, polarized politics, growing socio-economic disparity, inflation, finances, and trade wars remain significant obstacles. It’s akin to mastering Everest simulations but lacking the necessary gear, resources, and teamwork and the fair and just distribution of essentials to actually reach the summit. This is the crux of the report. Achieving net zero requires strong financial backing, unparalleled global collaboration, unwavering commitment, and extensive support networks. For those who find the report overwhelming, here are the key takeaways.
Progress and Challenges (2015-2022): Over the past decade, the journey towards a sustainable energy future has seen both triumphs and trials. From 2015 to 2018, solar energy capacity more than doubled (227 GW to 480 GW), wind energy grew by 36% (adding over 150 GW), and hydropower and bioenergy also saw significant increases (hydropower from 1,060 GW to 1,160 GW; bioenergy from 106 GW to 123 GW), driven by decreasing costs and strong policy support. However, the pace slowed in the following years. The global pandemic in 2020 reduced energy demand sharply, and geopolitical tensions in 2021 and 2022, particularly in Europe, led to a resurgence of fossil fuels as countries like Germany increased coal production by 35% to reduce reliance on Russian gas. In the US, the Inflation Reduction Act spurred growth, but delays in connecting clean energy projects to the grid hampered progress.
Renewed Momentum (2023): By 2023, the energy transition regained some positive momentum. Innovations in energy storage and grid management began to address integration challenges, and renewable energy started outpacing traditional sources. Global renewable capacity reached 3,870 GW, with significant contributions from solar (345.5 GW of new capacity) and wind energy (total capacity of 1,017 GW), marking a stabilization in the market despite ongoing geopolitical volatility.
The report says, 107 of the 120 economies surveyed have demonstrated progress on their energy transition journeys in the past decade. However, Europe remains the undisputed leader in the ETI rankings for 2024, with Sweden and Denmark not just leading the pack, but consistently securing top three positions year after year. This dominance underscores the urgent need for other regions to step up their game and for global collaboration to ensure a truly equitable energy transition.
You can find detailed WEF infographics here
Navigating the Complexities of High ETI Scores
While the report praises countries aligning their energy policy to global climate goals, the reality is that on-the-ground is far more complex. This raises the question: do high Energy Transition Index (ETI) scores truly reflect the future we hope for? Despite the falling costs of wind, solar energy, and electric vehicles, significant challenges remain. For example, parts of the energy system, like aviation and heavy freight, can’t be electrified easily and require expensive alternatives like hydrogen and biofuels. Moreover, the development of new materials needed to boost energy efficiency and production isn’t progressing quickly enough to meet climate demands. The daily and seasonal variations in renewable energy production necessitate major advancements in energy storage solutions. Currently, global adoption is driven more by cost savings than by regulation and policy, making it tough to ensure a stable and reliable energy supply. This complexity can often make projections about the future of the energy transition misleading if we don’t adequately consider these factors..
The narrative of these past years is clear: The energy transition is not a straight path projection but a convoluted journey, requiring continuous commitment and strategic foresight amid complex ongoing economic volatility and geopolitical tensions.
Uneven Progress: Regional Disparities in the Energy Transition
Asia-Pacific is emerging as a major driver of the global energy transition, with China, Japan, South Korea, and Australia leading the way. In 2023, the region accounted for 69% of new renewable energy capacity and saw nearly $1 trillion invested in clean energy projects – China alone investing approximately $700 billion and 60% global capacity addition. For a perspective, the global investment in renewables in 2023 was around $1.8 trillion, highlighting the significant contribution of the Asia-Pacific region towards energy transition.
However, disparities persist as countries like India and Indonesia struggle to balance economic growth with sustainability, hindered by continued fossil fuel reliance and slow policy implementation. The ETI index shows India making progress in renewable energy and policy frameworks. However, the reality is starkly different. India’s net-zero target for 2070, requires the country to have about 4,000 GW of power by 2050—ten times its current capacity. Coal remains dominant, supplying over 70% of electricity and contributing significantly to railway revenue. India plans to add 65 GW of coal power, indicating a continued reliance on coal for decades.
For the Global South, the energy transition is intertwined with broader development needs. This insightful paper by Gita Wirjawan, former Indonesian minster of Trade, on the paradox of sustainability argues that basic survival often outweighs sustainability. In developing economies, putting food on the table is the priority, not energy transition or carbon neutrality by 2050. The paper argues that sustainability resonates more with the developed world, representing 16% of the global population, and can seem elitist compared to the pressing needs of the other 84%. To help these economies move towards a just energy transition, broader financing support, global collaboration, and adequate flow of finances are essential. This stark reality underscores the urgent need for tailored support and solutions that address both development needs and sustainability, ensuring that the energy transition is inclusive and equitable.
For instance, while the ETI for Sub Saharan Africa may reflect some positive trends, the current state of energy in Sub-Saharan Africa is characterized by a conflicting reality. On one hand, there is significant potential and progress in renewable energy adoption and decentralized solutions. On the other hand, the increase in the number of people without electricity, driven by population growth and compounded by global crises, underscores the persistent challenges in achieving universal energy access. The recent studies pointed out that in 2022, 685 million people were without electricity, 10 million more than in 2021. The geopolitical and geo-economic ramification of Russia- Ukraine have severely impacted Africa with soaring food and cooking oil prices and disrupting humanitarian aid. Despite promising Energy Transition Index (ETI) scores, Africa’s progress remains fragile without robust global financial support to address these pressing challenges. This highlights the disconnect between the promise of energy policy initiatives and strategies and the harsh on-the-ground realities.
[highly recommend this powerful article by Meghan O’Sullivan and Jason Bordoff in Foreign Affairs. These eminent thought leaders unravel the intricate geopolitical challenges of the clean energy transition, revealing how ambitious climate actions can both ignite and resolve global tensions. They warn that poorly executed energy policies could deepen conflicts, while strategic measures can enhance global stability, arguing that focusing solely on net-zero emissions by mid-century would be a mistake]
Bridging Energy Transition Gaps
In the midst of rising protectionism and geopolitical complexities, the reality of the Global South is often overlooked. Celebrating high Energy Transition Index (ETI) scores and $1.8 trillion in clean energy investments in developed nations seems distorted when developing countries—home to 65% of the world’s population—receive less than 15% of these investments. Clean energy investment remains concentrated in advanced economies and China. Expecting the Global South to prioritize energy transition without addressing their broader development needs is fundamentally flawed. Espen Mehlum, Head of Energy Transition Intelligence and Regional Acceleration at the World Economic Forum, puts it succinctly: “This year’s Energy Transition Index delivers a clear message: urgent action is needed. Global decision-makers must make bold moves to regain momentum in the transition towards an equitable, secure, and sustainable energy future. This is critical for people, entire economies, and the fight against climate change
Bibek Raj Kandel is an energy policy and international development expert, and a Senior Fellow at Nepal Economic Forum. He has worked extensively, both in Nepal and internationally, providing advisory services to governments, industries, and international agencies in the energy and climate space. His experience includes working across diverse regions including South Asia, Asia Pacific, and Sub-Saharan Africa. He holds an MSc in Energy Management from the University of Twente, in the Netherlands and an MPA from Harvard University.
