Regulatory initiatives can accelerate the transition to cleaner and more efficient energy generation and consumption and provide dynamic incentives for innovation.
Implementing a range of regulatory initiatives can accelerate the transition to cleaner energy generation. These include redirecting fossil fuel subsidies, favoring low-carbon products through trade regulation, and setting a price on fossil fuels that reflects their true costs. If implemented in a concerted manner and at an appropriately stringent level, these initiatives can act as a strong vehicle for shifting demand and investment away from fossil fuels and towards low-carbon alternatives.
Currently, fossil fuels are among the most heavily subsidized commodities. In many cases, the impact is so significant that renewables will be cost-competitive with fossil-fuel-based energy in an unsubsidized market. Consequently, redirecting fossil fuel subsidies towards investments in energy efficiency and low-carbon technologies will have a dual effect against fossil fuel lock-in by making them less attractive investments while lowering demand. Investing the redirected funds can support the development of efficient low-carbon energy systems, facilitate industrial energy efficiency and develop clean energy opportunities in international markets.
National governments or regional bodies like the European Union can use existing international trade regulations to promote a shift away from energy-intensive products relying heavily on fossil fuels. In many countries, the costs to human health incurred due to local air pollution as a result of fossil fuels exceed GDP growth, in effect making the country poorer each year. Reflecting damages such as these in the price of fossil fuels through taxes or trade schemes could shift energy consumption to sources that protect both the climate and local livelihoods and environments. In addition, this would enhance national economic resilience by providing funds for the transition to sustainable energy systems.
Survey Findings
The respondent group under 30 years of age rates Regulated Energy Transition away from fossil fuels as a market opportunity with a high potential positive impact on society. It is also considered a positive opportunity for society by survey respondents in the group of lower-middle-income economies and in Sub-Saharan Africa. High- and higher-middle-income economies are generally less positive about this market opportunity.
When viewed through the business lens, survey respondents find the opportunity of a regulated energy transition less compelling. While still rated positively overall, then it is not very highly regarded for Its benefit for business or for its capacity to inspire new business ventures.
This market was surveyed globally in 2014 by more than 5500 leaders from both the public and private sectors. The survey was conducted in collaboration with the research company YouGov. The survey results were originally published in the Global Opportunity Report 2015.
Global Goals addressed
