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This report shows that neoliberal climate and energy policy has failed. It argues that the pursuit of endless growth and capitalist accumulation has resulted in an energy expansion, rather than an energy transition.
Download the full report here.
From politicians to corporate executives, media commentators to environmental campaigners, narratives evoking the “unstoppable” progress of a global transition from fossil fuels to renewable energy have grown increasingly commonplace.
However, in reality, the global shifts in energy production, energy usage and greenhouse gas emissions we urgently need are not happening:
Recently, some have argued that the Covid-19 pandemic and subsequent contraction in economic activity signal a turning point. Indeed, global energy demand fell by nearly 4% in 2020, while global energy-related CO2 emissions fell by 5.8% — the sharpest annual decline since the second world war.
Despite these short-term shifts, the pandemic has failed to result in any significant long-term changes for the energy sector or associated emissions:
As such, an energy transition with the depth and speed necessary for meeting the 2015 Paris Agreement shows no sign of materializing. Indeed, most of the world’s major economies are not on track to reach their Nationally Determined Contributions (NDCs) on emissions reductions.
These facts point to a clear conclusion: the dominant, neoliberal climate policy paradigm, which deploys a “sticks and carrots” approach that attempts to disincentivize fossil fuels through carbon pricing, while promoting low-carbon investment through subsidies and preferential contractual arrangements has been completely ineffective. This policy paradigm positions governments as guardians and guarantors of the profitability of private actors, thus preventing them from addressing social or environmental challenges head-on. The results have been disastrous:
Today the growth of renewables is being impeded by an investment crisis, and investment levels will need to increase dramatically in order to reach climate goals:
Furthermore, the current policy does not adequately account for the im- pact of “variable renewable energy” (VRE):
In sum, the current policy is incapable of delivering the energy transition urgently required. It relies on failed “market mechanisms” (“sticks and carrots”); suffers from a massive investment, deficit, and has failed to deal with the technical challenges posed by variable renewable energy.
We need an alternative paradigm. As we have seen with the pandemic, addressing complex global problems in short timescales calls for government planning and coordination. A TUED-PSI-FNME-CGT joint report on Public Energy Futures to be released at COP 26 will set out an agenda for democratically controlled public ownership and management of the energy sector. A truly public approach to energy transition is necessary for limiting climate change and avoiding the worst climate impacts.