Pandemic, War, and Global Energy Transitions

Zakeri, Behnam; Paulavets, Katsia; Barreto-Gomez, Leonardo; Echeverri, Luis Gomez; Pachauri, Shonali; Boza-Kiss, Benigna; Zimm, Caroline; Rogelj, Joeri; Creutzig, Felix; Ürge-Vorsatz, Diana; Victor, David G.; Bazilian, Morgan D.; Fritz, Steffen; Gielen, Dolf; McCollum, David L.; Srivastava, Leena; Hunt, Julian D.; Pouya, Shaheen

FG Sustainability Economics of Human Settlements

The COVID-19 pandemic and Russia’s war on Ukraine have impacted the global economy, including the energy sector. The pandemic caused drastic fluctuations in energy demand, oil price shocks, disruptions in energy supply chains, and hampered energy investments, while the war left the world with energy price hikes and energy security challenges. The long-term impacts of these crises on low-carbon energy transitions and mitigation of climate change are still uncertain but are slowly emerging. This paper analyzes the impacts throughout the energy system, including upstream fuel supply, renewable energy investments, demand for energy services, and implications for energy equity, by reviewing recent studies and consulting experts in the field. We find that both crises initially appeared as opportunities for low-carbon energy transitions: the pandemic by showing the extent of lifestyle and behavioral change in a short period and the role of science-based policy advice, and the war by highlighting the need for greater energy diversification and reliance on local, renewable energy sources. However, the early evidence suggests that policymaking worldwide is focused on short-term, seemingly quicker solutions, such as supporting the incumbent energy industry in the post-pandemic era to save the economy and looking for new fossil fuel supply routes for enhancing energy security following the war. As such, the fossil fuel industry may emerge even stronger after these energy crises creating new lock-ins. This implies that the public sentiment against dependency on fossil fuels may end as a lost opportunity to translate into actions toward climate-friendly energy transitions, without ambitious plans for phasing out such fuels altogether. We propose policy recommendations to overcome these challenges toward achieving resilient and sustainable energy systems, mostly driven by energy services.