INTRODUCTION:

Energy and the expansion of the economy.

The availability and accessibility of energy are essential inputs for a wide variety of public services, and the vast majority of governments place a high priority on ensuring that citizens have access to energy that is both affordable and reliable.The growth of industries, levels of productivity, and overall social development can all be hindered by a lack of energy.

Energy that is both affordable and reliable is necessary for the expansion of the economy and the provision of public services. The global energy market has been shaken up by factors on both the demand and supply sides, which has led to an increase in prices and a breakdown in supply chains. Therefore, countries like India that are dependent on fossil fuels faced a significant obstacle.

ISSUES 

Concerns: The Current State of the World’s Energy Crisis

• Factors Relating to Demand as well as Supply: The ongoing conflict between Russia and Ukraine has caused disruptions in the oil and gas supply chains. The cost of energy has increased as a direct result of heatwaves around the world and abnormally high temperatures. These factors contributed to an increase in the price of oil and natural gas on a global scale.

• Dependence on Nonrenewable Fossil Fuels: Fossil fuels are the source of more than 80 percent of the world’s energy and 64 percent of its electrical power. The majority of countries participate in fossil fuel imports, which leaves them exposed to geopolitical and economic supply shocks.

• An Excessive Reliance on Fossil Fuels: In order to fulfill their energy requirements, a great number of nations shifted their focus to coal, and those nations that already utilized coal stepped up their production of it, which put an incredible amount of stress on the market for coal.

• An Increase in the Cost of Electricity: Since low-income households devote a larger portion of their incomes to the purchase of electricity and gas, the higher cost of electricity brought on by the utilization of fossil fuels was a significant obstacle for these households.

• Disruptions to Electricity Supply Causing Widespread Blackouts As a result of disruptions to the supply of electricity, many nations experienced widespread blackouts, which caused significant disruptions to people’s lives.

• Dependence on Imported Fossil Fuels: Europe was in a precarious position as a result of its historically high dependence on Russian gas as a source of energy. This led to a challenging situation.

• Climate Change: Fossil fuels are responsible for 75 percent of the world’s emissions of greenhouse gases and 90 percent of carbon dioxide. Both flooding and drought can result in significant economic and human casualties.

Implications: The Effects On Individual Countries 

• The high cost of energy: Because households with lower incomes spend a larger portion of their earnings on electricity and gas, they are negatively affected when fossil fuel prices rise.

• Loss of power: Loss of power, which can be caused by disruptions in the supply of electricity, is a problem in many countries. As a result of a lack of fuel, many gas- and diesel-based power plants in Bangladesh, which are responsible for producing 85 percent of the country’s electricity, were forced to shut down, resulting in a blackout across the entire nation.

• Slowed economic growth: Increased prices and supply disruptions hit countries that are heavily dependent on fossil fuels, particularly imports. This slowed economic growth around the world, which forced some countries and regions into recession.

• Environmental degradation: Fossil fuel dependence causes air, water, and soil pollution and climate change. 

• Foreign exchange reserves: The price of fossil fuels has an effect on a country’s import bills as well as their balance of payments, which in turn has an effect on the country’s foreign exchange reserves.

• Loss of Revenue: Numerous regions and economies, particularly those of developing countries, are reliant on employment opportunities related to fossil fuels. These opportunities include mining, power generation, transmission, distribution, and storage. The revenue generated from fossil fuels is used by many governments to improve local infrastructure, which in turn assists local communities in diversifying their sources of income.

 Initiatives – “Structural & Functional Initiatives Taken“

Transitioning to renewable sources of energy faces a number of obstacles.

  • Increasing access to capital Despite the fact that the price of clean energy is continuing to fall, many clean energy technologies require high initial investment costs, which may be out of reach for the majority of developing countries. It is difficult for developing countries to transition to renewable energy sources due to the lack of international support for these countries.
  • People who may lose their jobs during the transition to low-carbon and renewable economies require good jobs and social support. Ensuring a just transition is one way to address this issue. The transition away from fossil fuels could cause economic instability in local communities because the industry employs a significant number of people around the world.
  • Obstacles on the technical front include the possibility of expensive infrastructure upgrades being required in order to make the transition to renewable energy sources. These upgrades may include energy storage and transmission systems.
  • Obstacles in the form of policies and regulations: In order to make the switch to renewable energy, reforms to subsidy systems, pricing mechanisms, and energy markets are required.
  • Because renewable energy sources only produce power on an as-needed basis, it is challenging to ensure a constant flow of electricity. It’s possible that energy storage and backup power systems will be required in order to guarantee supply.
  • Public acceptance: Some stakeholders, such as those whose livelihoods are dependent on fossil fuels or those who are concerned about the visual and environmental impacts of renewable energy infrastructure, may be resistant to the switch to renewable energy. Other stakeholders include people who are concerned about the visual impacts of renewable energy infrastructure.

The term “the way ahead” refers to innovation.

Way Ahead: Taking steps to address these challenges

• Increasing access to capital: developed countries have a responsibility to meet their climate finance obligations to developing countries. Bonds that are environmentally responsible and blended forms of financing might entice private investment.

• To ensure a fair transition, governments need to develop all-encompassing plans to safeguard the jobs of workers and the communities that will be impacted by renewable energy. It is possible to undergo retraining, invest in new industries, and set up social safety nets.

• Research and development: governments, international organizations, and the private sector all need to invest in R&D in order to reduce the costs of renewable energy technology and increase its efficiency.

• Energy efficiency: In order to reduce the amount of energy that is required and the associated costs, governments and businesses should prioritize energy efficiency measures such as retrofitting buildings and improving industrial processes.

• Increasing the rate at which renewable energy is put into use: Governments need to establish lofty goals and develop policy frameworks that encourage investment in clean energy.

• Constructing energy infrastructure: In order to encourage the use of renewable energy sources, governments need to make investments in grid upgrades, energy storage, and charging stations for electric vehicles.

• Fostering international cooperation: in order to transition to renewable energy sources, developing countries and developed countries must collaborate with one another. Help for developing countries can come in the form of technology, capacity building, and financial assistance.