Three ways to navigate the risks along low-carbon transition pathways

What do Sweden’s road freight electrification plans, Bali’s bioenergy use, and Kenya’s geothermal power plants and charcoal cookstoves have in common?

This sounds like the premise of a bad joke. If only it were. Instead, this list of the subjects of recent energy research projects suggests the wide scope of issues that must be addressed to meet international climate and sustainable development objectives.

As negotiators and observers gather in Poland for another round of negotiations on how to translate the national pledges of the Paris Agreement into concrete action, the urgency of their task cannot be exaggerated. Current efforts are not even enough to limit global warming to 2 degrees, let alone to 1.5 degrees.

Worse still, if we don’t decarbonise every sector of our economy in the coming decades, temperatures will likely rise above 2 degrees, and with devastating consequences. Tweaks won’t be enough. We have to initiate fundamental changes (such as getting rid of almost all fossil fuels by 2050) in how we produce, consume and distribute goods and services. That is, we have to change how we live.

The urgency is clear, but the details are not. Should we decarbonise road freight by using biofuels or by electrifying roads and vehicles? Should we put our money on large-scale renewable developments such as geothermal, or should we start from the bottom-up? Or, should we combine these and other potential options? The answers we choose will give rise to different transition pathways and innovations, each with its own costs and risks.

These kinds of risks and uncertainties are at the heart of a large, international research project, aptly called TRANSrisk, which is about to conclude 14 national case studies to better understand the energy transition pathways ahead.

As the findings emerging from the research show, risks lurk along the whole pathway of low-carbon transitions. Either they hinder the implementation or scaling up of a clean technology or sustainable practice, or they impact societies once they are implemented. Prices may rise. Not everyone will benefit. Things might get worse before they get better.

But, given the climate urgency, there is no time to wait. The risks are ample, but so are the opportunities for clean technologies and practices to usher in benefits. All of us, particularly the poor, will benefit from, cleaner environments. Renewable power is getting cheaper, and the jobs created during transition pathways often outweigh jobs lost in conventional sectors.

Conventional practices and technologies are based on long-standing behaviour and habits. The status quo is hard to disrupt. Highways have been built to accommodate large, diesel-powered trucks. Large, fossil fuel asset-heavy companies might use market power to make life hard for cleaner technologies to emerge. Regulations (or deregulations) might discentivise clean practices and technologies.

Our research shows that these risks are quite context specific, dependent on local institutions, customs and power structures. Nevertheless, there are lessons that apply universally to mitigate risks and to seize opportunities.

First, countries must have a vision. Every country needs a clear and ambitious policy framework that combines long-term vision with medium-term flexibility. Many case studies identify common barriers: bureaucracy, unclear political responsibilities between the national and sub-national levels, and the lack of sector-specific targets.

In Indonesia, for instance, policy-makers have an overall renewables target, but, for the time being, no specific biogas target in strategic plans. Plans do not always guarantee action, of course. They must be implemented. Nonetheless, they are the essential first step.

Second, new technologies need a level playing field. In Bali, for example, biogas struggles to compete against government-subsidized liquefied petroleum gas. The sheer market dominance of national fossil fuel companies makes using carbon-intensive fuels easier.

Worse still, policy instruments that put a price on pollution through taxes or emissions trading allowances are sparse or set too low. All this gives conventional technologies the competitive edge at the very time when sticking with business as usual courts disaster.

Third, transitions need to take place through a transparent dialogue that involves all stakeholders. This is evident in large-scale developments, such as geothermal where local communities must be part of the planning process if projects are to succeed. Pathways must be “co-designed” to be viable. Largely segregated “tribes” (scientists, policy makers, NGOs and business actors) will have to talk to one another to create the broad coalitions that can achieve aims.

Following through on those three key propositions would not accomplish everything. But it could begin the transition our planet needs.