ESG Mena continues its on-the-ground coverage at the World Energy Congress (WEC), sharing exclusive insights & event deep dives.
A poll at the World Energy Congress today revealed a consensus among energy stakeholders that global energy governance should accept different regional and national approaches.
The poll, taken during a session on leading global energy governance, reflects the overarching theme of this week: the energy transition will be pluralistic and approached by implementing different strategies at different speeds.
Indeed, on the panel, Bruce Lourie, President of the Ivey Foundation, commented on the importance of examining and factoring in regional differences as energy transition plans are formed.
Regional differences
Painting the picture of what the current energy mix looks like in Sub-Saharan Africa, Gilbert. M. Kamuntu, Chief Commercial Officer of Uganda National Oil Company Limited (UNOC), outlined that around 90 per cent is made up of biomass, firewood, and charcoal, while LPG contributes around just 5 to 6 per cent. As a result, Kamuntu said that deforestation is a real issue.
“We are taking out some of the carbon sinks, just for simply lack of options.”
Indeed, Africa’s deforestation rate is among the fastest in the world, and projections are that if current rates continue, a further 0.5 million hectares of forests will be lost by 2030.
Not only this, household air pollution from burning biomass results in nearly half a million premature deaths per year in Sub-Saharan Africa, meaning this is not just a pressing environmental concern, but also a grave public health issue.
Comparatively, in the EU last year, renewable energy share exceeded 44 per cent for the first time, with 27 per cent of that coming from solar and wind.
Discussing a lens through which these differences can be viewed, Lourie brought up the concept of symmetric policy development, whereby the characteristics of an individual region are assessed to try to understand what transition pathway that region might be on.
“Some can do it more quickly, some can do it more slowly, some have access to capital, some don’t have access to capital, some caused all the problems in the first place. Some are trying to catch up,” said Lourie.
“So, how do we balance all of those things in a way and create governance models that actually allow some parts of the world to transition more slowly, move more quickly?”
Here, Lourie said that leadership means if countries have the capital, they have more responsibility, and should move faster.
“So, it’s an argument for the richer countries to move more quickly, and also to help the global south through financing.”
Indeed, discussing collective responsibility in the energy transition, Marcus Hicken – Director for Energy Diplomacy, Climate and Security, Federal Foreign Office of Germany, said: “Europe, on its own, is just responsible for 7-8 per cent of global emissions. So, we can be the best kid in the class, but it doesn’t help to solve the problem. We have to work together with the entire world.”
Considering these vastly different starting points, the panellists agreed that a one-size-fits-all approach will not work and that these different voices need to be at the table—including fossil fuel companies, according to the UNOC representative.
Fossil fuel companies’ seat at the table
Here, Kamuntu said discussions on the trilemma without oil companies, be they IOCs or NOCs, are “not solving the problem,” adding that they will play a significant role in this new chapter.
Part of the reason behind this, he said, is energy security – noting that the world consumes around 100 billion barrels a day – alongside financing and industry expertise.
Of course, fossil fuel companies already have a seat at the table.
Indeed, the CEO of the UAE state-owned oil company ADNOC headed the climate summit last year, which saw record attendance from fossil fuel lobbyists.
These oil and gas companies also had a heavy presence in Egypt the year before, and they’re certainly not missing from the World Energy Congress this year.
In fact, many of these companies present on the ground at the energy congress are openly advocating for the decarbonisation of fossil fuels rather than their phase-out, the latter of which is the approach climate science states the world must take.
Indeed, in another session today, there were talks of supplying “clean” barrels of oil, while earlier in the week, the congress was told that these fuels do not need to be “eliminated.”
In the poll, 36 per cent of delegates supported global energy governance including industry, ICOs and NOCs as enablers.
Decoupling growth from consumption
In today’s governance session, the conversation also turned to the idea of a new growth paradigm.
“When I think about that …challenge of aligning our domestic political agenda with international commitments, I think the key to this is enabling prosperity while we also are reducing emissions,” said Robyn Holdaway, Future Energy Leader, World Energy Council and Senior Associate at Sherson Willis.
“This is a challenge of decoupling growth from consumption. It’s about changing what we value and how we value it.”
Holdaway explained that this decoupling of growth from consumption is seen in the reduction in energy intensity to GDP, which, in the energy system, she said is enabled by a shift from consumption to optimisation, digitalisation, and dynamic demand response.
“It’s about that digital transformation,” she said.
However, within this, Holdaway also noted that there needs to be a whole systems approach.
“I think the key is to understand these parts of our system as being connected… until we do that, I don’t think we’re going to value or incentivise the integration of digital technologies to the extent that is reflective of the true value that they bring to consumers.”
Meanwhile, Agnieszka Gajewska, Global Government & Public Sector Leader, PwC, commented: “We need to have the free flow of new technologies. We cannot have so many protectionist measures on the governmental level to effectively get these technologies to work in other countries.”
Achieving this, Gajewska said, requires “lots of political will” on top of funding and financing.
Redesigning governance models
At the World Energy Congress panel, the importance of bringing governance redesign to the fore was also underlined.
“We need new governance models,” said Lourie, calling for a rethink of institutional capacity to help build these governance models and accelerate the transition.
Here, he highlighted the Transition Accelerator, of which he is the founder and chair.
The organisation is aimed at building analytical and convening capacity, bringing together different value chains to get a better understanding of what transition means, embedded in the idea of competitiveness and trade.
“This structure is designed to be the model to bring people together to collaborate, and it comes down to the concept of creating what are called third-party intermediaries,” said Lourie. “I think it’s a really important structure… it’s bringing industrial policy and new convening models to really address transition.”
Indeed, when it comes to collaboration, the poll also revealed that, as moderator and former IEA Executive Director Maria Van Der Hoeven said: “Global energy policy is not just something for politicians.” In fact, forty-one per cent in the poll supported global energy governance promoting the involvement of citizens and young people.
Interestingly, the large majority of delegates also supported WEC being more involved in energy governance.
Advising on what this should look like, Gajewska said: “Keep the ecosystem close… keep us accountable. Because there is so much to be done and there will be choices to be made. I think we need to have someone objective enough to be able to hold the mirror against our face saying ‘Actually, this is what it means’ and hold us accountable.”
Stay tuned for more exclusive coverage from ESG Mena at the World Energy Congress.
By Madaline Dunn, Lead Journalist, ESG Mena.