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Six Ways Governments Can Transition Away From Fossil Fuels

Six main areas of action for governments could help ensure a managed, just, and equitable transition away from fossil fuels that “builds back better” from the COVID-19 pandemic:

1. Ensure COVID-19 recovery packages and economic stimulus funds support a sustainable recovery and avoid further carbon lock-in.

Many countries have begun to make investments in areas such as renewable energy, energy efficiency, green hydrogen, and improved pedestrian infrastructure.

But if this is accompanied by significant support for high-carbon industries, COVID-19 recovery measures still risk locking in high-carbon energy systems and development pathways for decades into the future.

Governments that choose to invest in high-carbon industries to boost economies and safeguard livelihoods in the short term — perhaps because they see few near-term alternatives — can nonetheless introduce conditions to that investment to promote long- term alignment with climate goals.

2. Provide local and international support to fossil-fuel dependent communities and economies for diversification and just, equitable transitions.

Each country and region faces unique challenges in a transition away from fossil fuels, depending on their dependence on production and their capacity to transition.

Inclusive planning is essential, as is financial, technical, and capacity-building support for communities with limited financial and institutional capacity.

3. Reduce existing government support for fossil fuels. Many long-standing forms of government support to fossil fuels — including consumer subsidies, producer subsidies, and public finance investment — stand in the way of a sustainable recovery to COVID-19 and need to be ended.

4. Introduce restrictions on fossil fuel production activities and infrastructure. Restricting new fossil fuel production activities and infrastructure can avoid locking in levels of fossil fuel production higher than those consistent with climate goals.

It can also reduce the risk of stranded assets and communities.

5. Enhance transparency of current and future fossil fuel production levels. A key barrier to aligning energy and climate plans is the lack of clarity on levels of fossil fuel production and planned or expected growth.

To improve transparency, countries could ensure that relevant production data are more readily and publicly accessible.

They can also provide information on how their fossil fuel production plans align with climate goals, and on their support to the production of fossil fuels.

Governments can also take steps to disclose their level of exposure to fossil fuel asset stranding and associated systemic risk, and to require companies within their jurisdiction to do so.

6. Mobilize and support a coordinated global response. Policies to transition away from fossil fuels will be most effective if supported by countries collectively, as this will send consistent, directional signals to energy producers, consumers, and investors.

International cooperation, both through established channels and in new forums, can support a just and equitable winddown of fossil fuels.

The Paris Agreement’s global stock take, nationally determined contributions (NDCs), and long-term low greenhouse gas emission development strategies (LEDS) offer opportunities to facilitate a transition away from fossil fuel production through the UN climate change process.

International financial institutions can help shift financial support away from fossil fuel production while scaling up support for low-carbon energy.