Europe's long-term sustainable energy future is not a given

Written by Eirik Wærness on 16 June 2017 in Thought Leader
Thought Leader

Europe's long-term sustainable energy future is not a given, argues Eirik Wærness.

Eirik Wærness | Photo credit: Statoil


Global energy markets are affected by several counteracting development trends. Population and income growth continue to boost energy demand, globally if not everywhere. The much-discussed energy transition is shaking up parts of the global energy system.

In other parts, changes are however slow, indicating that it will take considerable time to align the energy intensity of the global economy and the global fuel mix with common sustainability criteria.

Developments in 2016 and thus far this year indicate that a long-term sustainable energy future by no means is a given. The rapid ratification of the Paris agreement under the UN Framework Convention on Climate Change signals a political willingness to ensure reductions in greenhouse gas emissions. 


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Unfortunately, so far there is little to indicate that policies are in fact being adjusted to significantly increase the likelihood of reaching a 2° pathway, let alone the "well below 2°" ambition in the agreement. 

Reaching global climate goals requires cooperation between countries on framework conditions, on technology development, and on income and burden sharing at levels beyond anything we have seen in global politics.

Populism, nationalism, protectionism, sanctions, terrorism, and exits from international agreements could put our ability for rapid common action under pressure, as well as jeopardise progress on other sustainable development goals.

Possible future outcomes for global energy demand and fuel mix therefore vary significantly, depending on many interacting and very uncertain factors. This is particularly true when we look beyond the near future towards 2050. 

A tool to deal with uncertainties is to establish scenarios, different tales of the future, resting on different assumptions about regional and global economic growth, technological developments, market behaviour, conflict levels and implications, and energy and climate policies. 

In combination, scenarios can provide a realistic impression of the very wide outcome space for developments in global energy. Statoil's Energy Perspectives report contains three scenarios. 

The central scenario, Reform, proceeds from current macroeconomic and energy market trends and - in climate policy terms - from the Nationally Determined Contributions (NDCs) in the Paris agreement, with a gradually less prevalent role for market correcting policies as market-based solutions drive and deliver energy efficient and low-carbon technologies. 

Renewal is as before a story about a technically possible, but very challenging pathway to energy-related CO2 emissions consistent with the 2° target for global warming. It includes rapid and coordinated policy changes, accelerated energy efficiency improvements, and large changes in the global energy mix driven by revolutionary development in electricity generation and parts of the transport sector. 

Rivalry is a story about a multipolar world, characterised by mounting distrust in conventional politics and policy making, populism, protectionism and geopolitical conflict, and where focus on security of supply and other priorities overshadow global climate targets.

It is my hope that our Energy Perspectives 2017 report contributes to a fact-based discussion of multiple possible futures, so that our ability to prepare for future surprises improves.

 

About the author

Eirik Wærness is Senior Vice President and Chief Economist at Statoil

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