ESG Mena continues its coverage at the World Energy Congress (WEC), sharing exclusive insights & event deep dives.
On the fourth and final day of the World Energy Congress, the sheer scale of the global inequality gap was brought to the fore. On a panel, Helena Leurent, Director-General, Consumers International, told the congress that over the last 40 years, the richest one per cent of individuals have captured over twice the global income growth of the bottom 50 per cent.
In 2024, this gap has been stretched even wider, with the wealth of the one per cent reaching a record $44 trillion. This lies in stark contrast with data from the UNDP, which showed that in the last three years, 165 million additional individuals have fallen into poverty.
This rising income inequality reduces household energy affordability, resulting in higher levels of energy poverty – and there are huge disparities between regions.
In 2022, for example, the number of people living without electricity access reached 760 million, with 80 per cent of those people living in Sub-Saharan Africa. Meanwhile, for those with electricity access, globally, costs have risen between 62 per cent and 113 per cent.
This rising income divide is occurring alongside the intensifying climate crisis, and again, here, it is the world’s poorest who bear the biggest burden.
Against this backdrop, it appears that instead of progressing, the world is actually moving backwards. And indeed, this was the determination of the Sustainable Development Solutions Network (SDSN). Halfway to 2030, we’re way off track from meeting the Sustainable Development Goals (SDGs).
Similarly, on the clean energy transition, while the likes of the IEA’s Fatih Birol have said it’s “unstoppable,” the pace of change is far from where it needs to be.
WEC reframes the narrative
Indeed, the importance of speed in the transition (and the lack of it) was a key topic of focus at the World Energy Congress.
“It feels like we’re going slower. It feels like either for geopolitical reasons, [because] we’re not able to put the solutions together in a coherent way, or we’re not able to scale up,” said Leurent.
Alongside this was a continued emphasis that there will be multiple transitions, with different pathways taken by different regions and countries.
“The phrase ‘energy transition’ has become one of the most frequently used, politically loaded and polarising phrases in recent years,” said WEC CEO Dr Angela Wilkinson in her keynote address this week, outlining that there’s no “one-size-fits-all solution.”
From that point onwards, various parties spoke of “respecting” different energy transition pathways.
“We each show up with our own unique perspective about what we need to do to deal with [the energy transition]. We come from different places on this planet; we come from different backgrounds, different organisations, and different economic situations that we have to live with,” said Mike Howard, Chair of the WEC and CEO Emeritus, EPRI.
Adding: “My one request is to listen and understand because always remember this one thing, the other person may just be right.”
This narrative of plurality was accompanied by a question mark over the 2050 deadline from some.
“I think we have issues around that zero date; in some countries, it’s 2030, 2050, 2070. It’s been staggered again,” said Eithne Treanor, Moderator and CEO of TreanorMedia, in one session.
Here, there was the implication from some stakeholders that current climate targets are not grounded in reality.
The final day also saw Dr Wilkinson share a “mic-drop moment” from another session, where one delegate argued that sustainability has been a “market” and “political” failure.
When asked if he agreed, Kim Yin Wong, President and CEO of Sembcorp Industries Ltd, said it’s “too early to tell.”
“If we want to really move along sustainability and not have it be a failure, we need to think about how we can carry everybody along with us,” said Wong.
Not repeating oil and gas era mistakes
Another factor highlighted for ensuring sustainability’s success is taking proactive steps to prevent repeating the mistakes made in the oil and gas era.
Indeed, there’s no doubt that the energy transition is gaining momentum; last year, the world brought in 50 per cent more renewable energy capacity than the year prior – but as capacity scales further, there are a number of key considerations, particularly from the supply chain side of the equation. Here, the responsible sourcing and mining of critical raw materials is crucial.
Both the environmental and sociological impacts of the energy transition were discussed by delegates. On the former, HE Nasser Al Qahtani, Ministry of Energy, Saudi Arabia, said: “Today’s solutions will be tomorrow’s problems,” arguing that the energy transition is just shifting the problem from the air to the earth. HE Al Qahtani also put forward figures that the world will have to mine between four and eight times the amount that is currently mined.
However, in another session, Tatenda Phiri, Future Energy Leader, World Energy Council, addressed both of these points.
“I would like to touch on one of those myths, which is the idea that we don’t have enough materials to realise the energy transition. That’s not true. Geological resources are…available in excess all the way to 2050 to meet our net-zero targets.”
Phiri said that where there are challenges, it is around scaling, warning that we should not fall into what he called the Malthusian fallacy. Another point he refuted is the suggestion that the exploration of critical minerals will result in more emissions.
Indeed, a new report from the environmental research centre, the Breakthrough Institute, echoes a similar sentiment, noting that while the mining impact considerations of the energy transition are important, misleading narratives have “taken on a life of their own” and “warrant correction.”
Beyond this is the impact of critical materials mining on communities, something which Melina Laboucan-Massim, Founder of Sacred Earth Solar & Co-founder of Indigenous Climate Action, spotlighted.
Laboucan-Massim highlighted the impact of fossil fuel extraction on indigenous peoples, the communities of which, she said, have bore the burden without the benefit; in this new chapter, things must be different, she said. However, considering 2022 research found that 54% of energy mineral projects are located on or near Indigenous peoples’ lands, there’s a very real danger that history will repeat itself without resource governance and responsible mining.
Indeed, this consideration of the impact on communities is a fundamental component of ensuring that the energy transition is indeed just and equitable.
An example of this approach in action is the grassroots work of Barefoot College International, a global voluntary organisation that aims to empower marginalised communities through solar energy projects.
CEO Rodrigo París Rojas, the organisation’s Chief Executive Officer, took to the stage on Thursday, outlining the impact of the entity’s work and emphasising the critical need to ensure values, such as generosity, solidarity, empathy, and trust, are embedded at the heart of the energy transition.
Collaboration is key
Threaded through conversations across the week was a recognition from delegates that energy transition dialogue must penetrate geographical boundaries, and avoid “ideological prescriptions,” with international collaboration the key to progress.
However, alongside this recognition was the acknowledgement that there needs to be new ways of collaborating, new business models and new markets.
Expanding on this, Dr Wilkinson highlighted the challenges facing developing countries in Africa, calling the energy crisis in the region an “existential” issue. Here, the WEC Chief said that energy stakeholders are not yet converting the “listening and talking they’re doing” into the “action that’s necessary.”
“I feel I need to do more with the membership to really bring that forward so that there’s a capacity to change make in Africa, not change make for Africa.”
Meanwhile, Rojas called for greater integration of local communities and voices. “Here we have the privilege to be connected with a global agenda with wonderful people from different countries with a lot of power and influence; [it] is absolutely crucial that this connection [is] connected [with] the local voices, the local community.”
One of these voices from the local community is the youth voice, and at the congress, the WEC has acknowledged their importance with the creation of the Future Energy Leader program.
At the same time, moderator Betty Sue Flowers, writer, editor, and international business consultant, said that there is a feeling of hopelessness among this demographic.
Indeed, research from the youth non-profit organisation Force of Nature in 2021 found that over 50 per cent of young people felt that humanity is “doomed” when it comes to climate change – and climate change has only got worse since then.
However, Thaddeus Anim Somuah, Future Energy Leader and Global Senior Manager of Sustainability at Philips, said that there is reason for hope, and that change is possible.
“We can do it. If people are saying, “Oh, there’s not enough money to go around,’ who do we owe? We only owe ourselves, it’s just us. There’s enough money; we’ll make it happen. I think it’s really just a question of taking ownership and accelerating.”
Indeed, action needs to happen fast and research has shown that by 2050, the cost of climate inaction will be six times higher than the cost of limiting global heating to 2C.
In the closing ceremony, Michel Heijdra of the Netherlands Ministry of Economic Affairs and Climate Policy, echoed this call for ownership, urging strong energy cooperation: “Action is louder than words.”
The next World Energy Congress will be held in Saudi Arabia, a country which is a particularly strong advocate for the “multiple pathway,” transition approach.
In his final words to the congress, HE Al Qahtani said: “This is our pledge for the 27th World Energy Congress: We will leave no effort untried, no concept untested, and no argument unheard in our pursuit of a just energy transition for the whole world.”
How the energy transition will unfold remains to be seen. The International Energy Agency (IEA) and OPEC are currently at loggerheads when it comes to their predictions. While the IEA says oil is tapering off and forecasts that fossil fuel’s demand peak is on the horizon in 2030, OPEC disagrees and foresees continued growth. One thing is for sure – the road ahead will be a bumpy one, and transparency, collaboration and cross-border cooperation will be key to safeguarding a liveable future.
By Madaline Dunn, Lead Journalist, ESG Mena