As countries face critical choices in their energy strategies, amid
heightened geopolitical tension and a rapidly warming climate,
governments must ensure that energy security policies are compatible
with net-zero scenarios mapped out by the International Energy Agency
(IEA) or the Intergovernmental Panel on Climate Change (IPCC).
As confirmed by the latest IPCC Working Group III report on climate solutions, the
world is still heading for an excess of fossil fuel-based energy use
that will vastly exceed the carbon budget needed to meet the 1.5C Paris
Agreement goal. This trend must be halted.
Choices made by policymakers now must not delay the
longer-term adjustments that are needed for energy markets and
infrastructure to align with the Paris Agreement and reach net-zero
emissions, by 2050 at the latest.
Specifically, the development of new fossil fuel reserves will create
lock-ins and stranded assets at an enormous opportunity cost. Among
other things, governments must now rule out locking in long-term fossil
fuel subsidies, which run contrary to net-zero policies and exacerbate
market distortions.
In the short term, using all available energy resources – including
the immediate scaling of energy efficiency – to diversify the energy
supply must be a top priority for many countries, especially in Europe.
In the medium to longer-term, the national security argument for
accelerating the net-zero transition has strengthened considerably.
The only approach that can and will lead to long-term energy
security is a massive scaling of low- and zero-carbon technologies –
including new, breakthrough technologies – and infrastructure.
With the IPCC noting “sustained decreases” over the last decade in
the unit costs of solar energy (85%), wind energy (55%), and lithium-ion
batteries (85%), these are viable steps towards energy system
resilience, a greener economy, the provision of green jobs, and the
protection of businesses and consumers against future price spikes in
oil and gas.
We echo the call by the UN Secretary General António
Guterres to ramp up finance to help countries adapt to rising
temperatures. Here, the Net-Zero Asset Owner Alliance’s work on
combining and scaling public-private finance and its call to action
for asset managers to collaborate on catalysing appropriate blended
financial vehicles is supportive of the transition to a fairer net-zero
world.
We will continue to engage with society to invest in climate change
mitigation, adaptation, and clean technologies to ensure a just
transition at an unprecedented scale.
This year, the Alliance is will be publishing a position paper to
consider the implications of energy insecurity and net-zero emissions
for the oil and gas sectors, following up on the publication of a
position on thermal coal in 2020.
The Net-Zero Asset Owner Alliance Steering Group members are as follows: Günther Thallinger (Chair), Board Member at Allianz SE; Stephan van Vliet, CIO of Prudential; Lesley Ndlovu, CEO of African Risk Capacity; Charles Émond, CEO of CDPQ; Torben Möger Petersen, CEO of PensionDanmark; Eric Usher, Head of UNEP FI; and David Atkin, CEO of PRI.
The Strategic Advisors include: Christiana Figueres, Global Optimism and Margaret Kuhlow, WWF.
About the UN-convened Net-Zero Asset Owner Alliance
The 71 members of the UN-convened Net-Zero Asset Owner Alliance have
committed i) to transitioning their investment portfolios to net-zero
GHG emissions by 2050 consistent with a maximum temperature rise of
1.5°C above pre-industrial levels; ii) to establishing intermediate
targets every five years; and iii) to regularly reporting on progress.
The Alliance is convened by UNEP’s Finance Initiative and the Principles
for Responsible Investment (PRI). The Alliance is supported by WWF and
Global Optimism, an initiative led by Christiana Figueres, forme
UNEP FI
© UNEP
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article