Solarize Charlotte Project. by Jack Miczek, Greenpeace.
The year 2022 was a tough one for the growing number of people living in food insecurity and energy poverty around the world, and the beginning of 2023 is looking bleak.
Russia’s war on Ukraine, one of the world’s largest grain and fertilizer feedstock suppliers, tightened global food and energy supplies, which in turn helped spur inflation.
Drought, exacerbated in some places by warring groups blocking food aid, pushed parts of the Horn of Africa toward famine. Extreme weather disasters have left trails of destruction with mounting costs on nearly every continent. More countries found themselves in debt distress.
But below the surface of almost weekly bad news, significant changes are underway that have the potential to create a more sustainable world – one in which humanity can tackle climate change, species extinction and food and energy insecurity.
I’ve been involved in international sustainable development for most of my career and now teach climate diplomacy. Here’s how two key systems that drive the world’s economy – energy and finance – are starting to shift toward sustainability and what to watch for in 2023.
Ramping up renewable energy growth
Russian President Vladimir Putin’s war on Ukraine has reverberated through Europe and spread to other countries that have long been dependent on the region for natural gas. But while oil-producing countries and gas lobbyists are arguing for more drilling, global energy investments reflect a quickening transition to cleaner energy.
Call it the Putin effect – Russia’s war is speeding up the global shift away from fossil fuels.
In December, the International Energy Agency published two important reports that point to the future of renewable energy.
First, the IEA revised its projection of renewable energy growth upward by 30%. It now expects the world to install as much solar and wind power in the next five years as it installed in the past 50 years.
The second report showed that energy use is becoming more efficient globally, with efficiency increasing by about 2% per year. As energy analyst Kingsmill Bond at the energy research group RMI noted, the two reports together suggest that fossil fuel demand may have peaked. While some low-income countries have been eager for deals to tap their fossil fuel resources, the IEA warns that new fossil fuel production risks becoming stranded, or uneconomic, in the next 20 years.
The main obstacles to the exponential growth in renewable energy, IEA points out, are antiquated energy policy frameworks, regulations and subsidies written at a time when energy systems, pricing and utilities were all geared toward fossil fuels.
Look in 2023 for reforms, including countries wrestling with how to permit smart grids and new transmission lines and finding ways to reward consumers for efficiency and clean energy generation.
The year 2023 will also see more focus on developing talent for the clean energy infrastructure build-out. In the U.S., the recently passed Inflation Reduction Act and the Bipartisan Infrastructure Law will pour hundreds of billions of dollars into clean energy and technology. Europe’s REPowerEU commitments will also boost investment. However, concerns about “buy American” rules within the new U.S. climate laws and an EU plan to launch a carbon border adjustment tax are raising fears that nationalism in trade policy could harm the speed of green growth.
Fixing international climate finance
The second system to watch for reform in 2023 is international finance. It’s also crucial to how low-income countries develop their energy systems, build resilience and recover from climate disasters. Read more
