THE SLOW, ACCELERATING TRANSITION: A RETROSPECTIVE OF COP27 AND THE PIVOTAL YEAR IN ENERGY.

• Author: von Kursk, Olivier Bois

Olivier Bois von Kursk is a policy analyst working on energy transition scenarios with International Institute for Sustainable Development, specifically the phase out of oil and natural gas and the widespread adoption of renewable energy. The Journal spoke with Olivier to review the year 2022 in energy, which saw massive developments in virtually every area; revisit COP27, which took place in Sharm el-Sheikh, Egypt in November 2022 and saw the creation of the first global loss and damage fund, a significant if premature climate victory; and return to the issue of climate equity and a fair transition for all states and all peoples moving forward.

Journal of International Affairs (JIA): What is the International Institute for Sustainable Development (USD), and what is your role within the organization?

Olivier Bois von Kursk (OBVK): IISD is an independent think tank and a nonprofit research institute, working on several key issues for the transition to a sustainable world. We have several different programs. First, we have one that works on transforming institutions through economic and legal instruments, another that focuses on resilience and how to adapt to this changing world, and one that focuses on the energy transition and climate policies. I sit in the energy program and work with climate and energy scenarios limiting warming to 1.5 degrees to assess the impact of different policy and technology choices on our ability to comply with the Paris Agreement temperature target.

Accordingly, we make recommendations on adequate fossil fuels phase-out pathways which comply with feasible and viable transition scenarios. In order to achieve this, I look at the hundreds of scenarios published in the IPCC database together with 1.5C-consistent pathways from intergovernmental organizations such as the International Energy Agency (IEA); the International Renewable Energy Agency (IRENA); energy consultancies such as Bloomberg New Energy Finance and Navigant; the UN Principle for Responsible Investment; and several others. Then, I apply feasibility and sustainability criteria to analyze which models have to most realistic assumptions on policy and technology choices. I then extract data on key features of the energy transition from selected scenarios and make policy recommendations based on them.

One of the many challenges of working with Integrated Assessment Models (IAMs), which provide insights about ways the future may unfold, based on various technical, economic, societal, and policy assumptions, is that many tend to rely on unproven technologies to remove C02 from the atmosphere or from fossil fuel combustion processes. Uncertainties around Carbon Capture and Storage (CCS) technologies constitute a major risk to the achievability of the Paris goals. Assumptions around CCS and potential carbon sequestration, as well as large scale afforestation and reforestation in IAMs, have a large incidence on the 1.5C consistent rate of oil and gas phase-out. We consider that modeling gigantic amounts of carbon removal technology (with technologies that do not exist today) is less realistic than undertaking efforts to phase out fossil fuel rapidly with existing wind and solar technologies, which are already cost-competitive and demonstrated at scale.

Accordingly we apply some constraints on the deployment of carbon dioxide removals in IAMs we chose to make recommendations with. This provides more realistic insights on what would be appropriate rates of coal, oil, and gas phase-outs required to limit warming to 1.5C. Consequently, it also indicates the rates of wind and solar deployment needed and the corresponding amount of finance needed for the energy transition overall. Last but not least, I also conduct some research on how to integrate equity consideration in these modeling exercises. Just energy transitions imply that high-income fossil fuel producers (which are large historical emitters with highly diversified economies) would need to phase out their fossil fuel production significantly faster than global averages shown in models to allow more time for emerging economies to transition from their carbon intensive energy sector. Hence, we also look at disaggregated regional data to assess fairness in sharing mitigation efforts between countries.

JIA: 2022 was a significant year for energy. The Russian invasion of Ukraine and the energy situation in Europe is disrupting the global energy landscape. It feels as though people have really come to accept that solar and wind can he and are cheaper than traditional fossil fuels. As someone who works in the space, who follows these things closely, what are some of your takeaways from this year and how things have changed--or maybe not changed?

OBVK: The past year has certainly been a pretty tumultuous year for the energy markets, with gas prices hitting record levels in the EU before coming down at the end of the year. The outset of the war in Ukraine triggered huge shortages of gas, on which Europe remains highly dependent. The conflict also created a situation where several large fossil fuel producers were eager to fill that gap and increase their production to supply the European market with liquified natural gas (LNG).

European heads of state have sought to sign gas deals in Africa, supporting new gas development and LNG infrastructure projects. The benefits of these deals are quite debatable, since developing any new oil or gas field typically takes about three to five years minimum. Alternative wind and solar projects are actually more much competitive financially, especially in the EU, and they could be deployed faster than the timelines required to develop new gas fields with relatively low-interest rates and capital costs.

In the meantime, however, the EU also significantly raised its renewables deployment target, and the bloc's renewable electricity capacity is now projected to double by 2027. Additional efforts to improve energy efficiency by promoting the installation of heat pumps, better insulation, and electrification are also expected to alleviate the short-term gas supply crunch to phase out all Russian gas imports. Overall, I think the case that wind and solar are the best insurance to provide energy security became an increasingly dominant narrative in 2022. The consequences related to volatile fossil fuel markets and the dependence on foreign fossil resources also became obvious, forcing the EU to accelerate its energy transition.

JIA: Significant movement was also achieved at this year's United Nations Climate Change Conference, COP27. How did this year's edition compare to those of past years?

OBVK: First of all, the agreement to create a new loss and damage fund was a big step for the negotiation and a large victory for lower income countries worst hit by climate extremes. However, this remains a relatively minor achievement for addressing the wider equity concerns related to sustainable development in these countries. It's important to recognize that funding loss and damage only addresses the symptom, not the cause, of global heating. It should also provide a startling reminder that extreme climate events have become so disruptive that mitigation and adaptation are no longer sufficient to alleviate the repercussions of the climate crisis.

Preventing global mean temperature rise above 1.5C requires ensuring a just transition away from fossil fuels. This shift towards renewable energy systems across the world demands that significantly more climate finance flows from developed countries toward developing and emerging economies.

Accordingly, one of the major shortcomings from COP27 was its failure acknowledge the need to phase-out fossil fuels in the cover text. Even though more than 80 countries across all negotiating blocs called for the phasing out of all fossil fuel, this proposal was block by a handful of large fossil fuel producers.

Nevertheless, the increasing support to address fossil fuels in the United Nations Framework Convention...