Policymaking is crucial in enabling this transition to take place globally. The transition to a sustainable energy system is essential to mitigate the impacts of climate change and achieve a more sustainable future. Here are some ways in which policymaking can support a successful global energy transition:
- Setting ambitious targets: Policy-makers can set ambitious targets for renewable energy deployment, energy efficiency improvements, and emissions reductions. These targets can provide a clear vision for the energy sector and drive investment and innovation toward the energy transition.
- Providing incentives: Policy-makers can provide financial incentives such as tax credits, subsidies, and grants to promote renewable energy deployment and energy efficiency improvements. These incentives can make renewable energy and energy efficiency more competitive with fossil fuels and incentivize investment in clean energy technologies.
- Regulatory frameworks: Policy-makers can establish regulatory frameworks that promote renewable energy and energy efficiency improvements while phasing out fossil fuels. These frameworks can include carbon pricing mechanisms, energy efficiency standards, and renewable energy mandates.
- International cooperation: Policy-makers can collaborate internationally to promote the transition to sustainable energy. This can include supporting the transfer of clean energy technologies to developing countries, sharing best practices, and collaborating on research and development of new technologies.
- Supporting research and development: Policy-makers can support research and development of new clean energy technologies by providing funding for research and development, creating innovation funds, and partnering with private sector companies to develop new technologies.
In the 21st century, when humans face an existential crisis from global warming and climate change, sustainable growth and development will need to be aligned to save the nation and the planet from approaching armageddon. The Northern Hemisphere, which contains most of the landmass, has seen a rise of 0.8 degrees Celsius in the past twenty years alone. The polar ice caps are rapidly melting. The largest and the most prosperous and populated regions face the greatest threat to the expected rise in sea levels.
The most populous regions of the world, like India, China, East Asia, and others, need energy to grow and prosper. Most of the current energy sources are still fossil fuel-based. The transition to green energy sources faces technological and cost challenges. Technologists are working hard to develop better energy storage technologies. Soon many of these technical barriers will get breached, paving the way to an enhanced pace of transition.
A financial infrastructure must support the transition to cleaner, climate-friendly technology to fund and drive growth. Long-term and short-term investment has to be made available to help the change. Policymaking has a major role in guiding and sustaining these changes. Regulation and incentives to support the transition to a green economy must be implemented. Disincentives will also need to be brought to prevent interest groups from perpetuating the fossil-based economy’s status quo. The role of policymaking is critical to a sustainable climate-friendly transition.
Climate Change: Financial Risks and Opportunities