The global energy transition is an urgent necessity. But the global think tank and NGO World Economic Forum has warned that many challenges, including geopolitical conflicts, supply chain disruptions and economic volatility, have hampered the collective efforts of countries to reach the global goal of net zero – where harmful greenhouse gas emissions are balanced by removing the same amount from the atmosphere – by 2050.
Advertisement
Such delays will only worsen the present-day consequences of climate change, which include extreme weather events such as hurricanes, tornadoes, heatwaves and torrential rainfall, as well as worsening air quality, widespread water scarcity and the loss of environmental biodiversity.
The frequency and severity of these events are already generating significant economic losses worldwide. Between 2014 and 2023, nearly 4,000 climate-related events cost the global economy US$2 trillion – including US$451 billion lost during 2022 and 2023 – the International Chamber of Commerce reported last year, which makes the economic case for transition undeniable.
About three-quarters of all greenhouse gas emissions still stem from the energy sector, according to UN figures, underscoring the importance of reform. While global clean energy spending hit about US$1.8 trillion in 2023, it will need to nearly double to US$4.5 trillion each year by the early 2030s to align with the net-zero goal. Therefore, a systemic transformation of how energy is produced, distributed and consumed is needed.
Why Asia’s transition will lead to global success
Advertisement
The Asia-Pacific region is home to 60 per cent of the world’s population, about 4.3 billion people, UN figures show. This vast population, which includes three of the top five global economic powers – China, India and Japan – is driving unprecedented energy demand through rapid urbanisation and industrialisation.