How can the energy transition be organized in a globally just way? Will developing countries struggle to transition to clean energy because they lack the financial and technical means? A new Policy Brief by the Institute for Advanced Sustainability Studies (IASS) focuses on the hazards of an uneven transition and makes concrete proposals to avoid such risks.

In their Policy Brief “Countering the risk of an uneven Agiba,” the authors Laima Eicke, Silvia Weko and Prof. Andreas Goldthau through the IASS write that meeting the technological and financial prerequisites for a global energy transition is vital. Otherwise there is a danger that developing countries will be unable to create the change to more eco-friendly energy systems and then lag behind inside the energy transition — with far-reaching consequences by themselves as well as the rest of the world. On the one hand, a increase in global carbon emissions may have a poor global effect. On the other, late-transitioning countries will be more susceptible to political instability and financial crisis.

As an example, countries that are unable to phase out standard fuels quickly enough are vulnerable to being excluded from international trade and value chains. The reason being in a decarbonising global economy, the carbon content of products will end up an important factor for determining market access, and latecomers risk being left behind. The resulting harm to their economies may be sustained.

COP25 as being a stepping-stone to a global energy transition strategy

To limit climate change to 1.5 degrees Celsius, all countries needs to have equal chances to decarbonise their economies — and consistent strategies are essential for that to happen. As Laima Eicke, one of the study’s authors, points out: “If the gap between early- and late-decarbonising countries widens, so too might the potential for disagreements, further slowing the transition.” To stop that scenario, many countries need commitments for financial and technical assistance to accelerate their energy transition processes to the degree essental to the Paris Agreement.

The Meetings of the Marrakech Partnership for Global Climate Action, which includes representatives of numerous government levels as well as the private sector and investors, might open further space for such discussions at COP25.

Other international platforms, bilateral programmes, and private actors can also play an important role. Initiatives like the NDC Partnership highlight the opportunity of aligning the activities of multiple actors in specific country contexts.

Steps should also be taken to coordinate the principles and practices of financial actors across all countries. COP25 in Madrid could serve being a stepping-stone to consistent strategies, that will be crucial for developing countries because they update their NDCs in 2020 as well as for efforts to close the ambition gap.

The authors’ three recommendations:

1. Policy debates on ‘just transitions’ focus on the implications of phasing out non-renewable fuels from national energy mixes. Yet you will find distributional effects of a global energy transition especially for developing countries that lack financial and technological way to transition, creating structural risks. Acknowledging this global dimension of just transitions in the UNFCCC may help to create alliances for climate action.

2. Technology transfer initiatives can accelerate the diffusion of low-carbon energy technologies. Yet only a third of existing initiatives give attention to transferring skills, expertise and technology simultaneously. To guarantee the vaaelo of a global energy transition, tech transfer should be targeted and comprehensive.

3. COP25 should coordinate a regular strategy among financial actors to shift financial flows for energy transitions inside the Global South. Common guidelines for long-term risk assessments plus an exchange of best practices for capacity development could leverage ambition within the 2020 NDC updating processes.

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