Outlook & Commentary | Climate change
Energy transition and energy security – complementary or conflicting?
The crisis in Ukraine has exposed key vulnerabilities in the world’s energy mix, bringing the issues of energy security, affordability, and resilience to the fore. However, this also heightens the near-term risks to energy transition and the Paris Agreement goal of limiting global warming to 1.5°C. A key question to explore now is whether the twin goals of energy security and energy transition can be complementary?
Key takeaways:
- The crisis in Ukraine has accelerated the urgency to define the future energy mix, which requires a fundamental shift towards renewable energy sources by 2050
- A separation of energy consumption from GDP growth is required to reach a trajectory of global warming below 1.5°C
- While there is agreement on broad trends, there is still a lack of consensus on the precise energy transition pathways
- Prioritising short-term energy affordability over decarbonisation is a risk, although the exposed energy security vulnerabilities may aid the transition
- Closing the energy transition funding gap will open the door to investment opportunities in three areas: fossil fuel reduction; transition to renewables; climate-focused solutions