It is not a case of abandoning energy transition, but more a case of balancing it with harsh realities<\/p>\n
The global climate summit COP30 that took place in Brazil in November fell short of expectations. It is not that the world is not concerned about climate change or that energy transition is not progressing, but more the outcome of the emerging global energy reset.<\/p>\n
The world is undergoing a shift from purely climate-focused policies to a more \u2018pragmatic\u2019 approach that prioritises reliable, affordable, and secure energy. It acknowledges continued dependence on fossil fuels while integrating renewables and nuclear power, recognising that energy access is crucial for development and stability, setting-up climate goals based on practical realities rather than extreme predictions. This is what has now become known as \u2018Energy Pragmatism\u2019.<\/p>\n
This was clear from the updated \u2018nationally determined contributions\u2019 (NDCs) and adaptation plans to 2035, submitted by countries on the run-up to COP30. Based on these, the world remains on track for 2.3-2.5\u00b0C of warming\u00a0by 2100.<\/p>\n
For the first time there was an acknowledgement at COP30 that there is likely to be an \u2018overshoot\u2019 of the Paris Agreement 1.5\u00b0C goal set 10 years ago.<\/p>\n
A substantial gap exists between pledges and reality, as countries strive to deliver affordable energy at home, to meet demand and avoid energy crises. Their primary concerns are reliable energy supply and low costs. They are no longer pursuing emissions reductions at any cost \u2013 if they actually ever did.<\/p>\n
Honest debate<\/p>\n
Writing in the Financial Times end October, Greek Prime Minister Kyriacos Mitsotakis hit the nail on the head when he said \u201cEU\u2019s Green Deal is at a crossroads. High energy prices leave little room to burden our economies with additional costs.\u201d He added that EU\u2019s energy transition must reinforce a broader strategic framework of where Europe wants to be in the world. \u201cFor too long we behaved as if the energy transition is a morality game.\u201d In doing so, the system and its effects on the public and on Europe\u2019s competitiveness have become politically untenable. \u201cIt is time to make our exit from this.\u201d<\/p>\n
Mitsotakis forcefully made the point that the green transition cannot be an end in itself. \u201cFor many years, Europe elevated decarbonisation above everything else. Other goals \u2013 employment, industrial production, strategic autonomy \u2013 lost when they went up against decarbonisation. We cannot afford to stay on this path.\u201d<\/p>\n
He argued that: \u201cDecarbonisation is vital but it is not the only objective. If we must accept some emissions for a bit longer to save our industries or to maintain social cohesion, so be it. We must have these debates honestly. We cannot begin with climate neutrality and hope everything else falls into place.\u201d<\/p>\n
Europe appears to be heeding this advice. Following a watering down of its 2040 emission targets, and in response to a backlash against environmental regulation, it has started rolling back environment laws \u2013including corporate sustainability laws \u2013 to boost competitiveness.<\/p>\n
In 2025 the EU went from the Green Deal to realism. And it is not just in response to Trump. The rising costs of the green transition affected the European economy and forced EU\u2019s leadership to reconcile its climate ambitions with prioritising the competitiveness of its industry.<\/p>\n
In a recent interview RWE\u2019s CEO, Markus Krebber, outlined a clear message: \u201cThe energy transition is necessary but expensive, it requires realism and long-term planning. And during that the industry must remain sustainable without threatening its competitiveness in the global market.\u201d He said: \u201cif we push too hard, people will vote for parties that none of us want \u2013 and then we won\u2019t even achieve the targets.\u201d<\/p>\n
JPMorgan CEO Jamie Dimon says Europe has a \u2018real problem\u2019: \u201cThey\u2019ve driven business out, they\u2019ve driven investment out, they\u2019ve driven innovation out.\u201d He is proving to be right.<\/p>\n
Realistic climate policies<\/p>\n
The EU is not the only one scaling back its climate policies. A global energy reset is happening around the world. It is not a case of abandoning energy transition, but more a case of balancing it with harsh realities.<\/p>\n
China is pursuing this balance, by following President Xi Jinping\u2019s advice that it should \u201cestablish the new before destroying the old\u201d. Despite developing low-carbon technology faster than anybody else, it is not abandoning fossil fuels. This policy was clearly articulated at COP30 by Liu Zhenmin, China\u2019s climate envoy, who said: \u201cSome nations propose roadmaps solely focused on \u2018fossil-fuel phase out\u2019 without concurrently considering renewable energy development. This approach is unfeasible and would severely undermine national energy security, economic growth and social stability.\u201d<\/p>\n
Even Canadian Prime Minister Mark Carney who 10 years ago, while governor of the Bank of England, popularised the phrase \u2018stranded-assets\u2019, this year fast-tracked approval of a new LNG export terminal,\u00a0promising to \u201ctransform our country into an energy superpower\u201d.\u00a0He has also rolled back some of Canada\u2019s climate policies and promoted new fossil fuel projects to boost investment.<\/p>\n
What has been unfolding globally is not so much an \u2018energy transition\u2019 as an \u2018energy-addition\u2019.<\/p>\n
Climate change will not go away and \u201cdecarbonising the economy makes good sense.\u201d But climate policies must be realistic and resilient, enhancing energy security and affordability, leading to improvements in living standards, especially in the developing world.<\/p>\n
Energy reset<\/p>\n
While accelerating energy transition remains important, global energy demand is rising faster than renewable energy. In 2024 total energy grew by 11.9 Exajoules, while renewables grew by 2.8 Exajoules, and provided 5.5 per cent of the total. Most of the difference was provided by fossil fuels. In addition, total energy growth has been increasing year-on-year. It was 9.2 Exajoules in 2023 and 7.8 Exajoules in 2022, confirming that the world is in an \u2018energy-addition\u2019 mode. The gap between total energy and renewables growth has in fact been widening.<\/p>\n
Often when people talk about energy, they actually mean electricity, where renewables are doing better. But energy transition involves total energy. Based on the above figures there is a long way to go before renewables growth can close the gap. And while that is happening, there is a need for an energy reset.<\/p>\n
Michael Liebreich, senior contributor of BloombergNEF, put it quite succinctly: \u201cThe climate and clean energy community is facing a choice. It can remain reactive, doubling down on old narratives, pressing on with existing policies, preaching to the converted. Or it can undertake a pragmatic reset: Wind back historical over-reach, accept harsh realities, address legitimate concerns, refresh its offer and find new ways of communicating with a confused public.\u201d And it should stop trying to make them feel guilty, using implausible scenarios to scare them. People resist paying high costs now for future benefits. Their economic priorities are short term.<\/p>\n
What is happening now is a pragmatic reset of climate policies, climate targets and energy priorities. Energy transition has barely started. It will be a long process.<\/p>\n","protected":false},"excerpt":{"rendered":"It is not a case of abandoning energy transition, but more a case of balancing it with harsh…\n","protected":false},"author":2,"featured_media":206725,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[273,111,139,69,147],"class_list":{"0":"post-206724","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-environment","8":"tag-environment","9":"tag-new-zealand","10":"tag-newzealand","11":"tag-nz","12":"tag-science"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/206724","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=206724"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/206724\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/206725"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=206724"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=206724"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=206724"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}