COP21: Investment shortfall to tackle global warming
08 December 2015
As governments and business digest the agreement made at COP21, the UN Climate Change conference in Paris, the Executive Chair of the World Energy Council Trilemma warned the pace of investment to keep global warming below two degrees needs to “ramp up”.
Joan MacNaughton told students on Warwick Business School’s Global Energy MBA both governments and businesses need to work together to significantly increase investment.
Governments and energy developers are grappling with the energy trilemma: how can there be equitable and affordable access to modern energy around the world? How can the energy we use be more sustainable and so address the risks of climate change? And how can access to energy be secure and reliable?
“I think it’s fair to say that all countries find it a challenge,” said Ms MacNaughton, who combines her role as Executive Chair of the World Energy Council’s Energy Trilemma programme with being an independent expert on world energy and a member of the University of Warwick’s Council. “Although some countries do much better than others. It tends to be a bit easier for countries the wealthier they are, but interestingly some poor countries outperform even some of the much richer countries.
“According to the International Energy Agency, we need $40 trillion between now and 2035 in energy supply investment and $8 trillion in energy efficiency and energy demand measures. If you look at what we need to spend to meet the goal of trying to keep global warming below two degrees centigrade, that figure goes up to $53 trillion.
“You need a partnership between energy developers and policymakers so we can have that ramp up in investment. We have to get this right because the foreseeable consequences are very drastic.”
The World Energy Council’s 2015 Trilemma Index is a comparative ranking of 130 countries, benchmarking their energy systems to assess how well they manage the trade-offs between the three trilemma goals.
Now in its fifth edition, the 2015 index shows signs of progress for all dimensions of the energy trilemma, although it remains a struggle for most countries to develop a balanced approach.
“As the world’s leaders gather in Paris, it’s work by Joan and organisations such as the World Energy Council that help us see the path ahead for the supply and use of energy around the world.” said David Elmes, Professor of Practice and course director of the Global Energy MBA.
“While the right agreements and policies at global and national levels will confirm the direction, much of the responsibilities for delivering those trillions of dollars of investment rest on the shoulders of companies in the global energy industry.”