“The Commission considers there is a role for natural gas and nuclear as a means to facilitate the transition towards a predominantly renewable-based future,” a recent statement released by EU reads.”
The goal of emerging economies is to grow her socio-economy, lift citizens out of poverty and benefit immensely from the accompanying advancement. However, to a keen observer, the conversations around fossil fuel elimination solely to reduce climate pollution may appear too far left.
Energy Transitions are fundamentally linked to Economic Transitions. To expect one without the other is inexorable.
However, this current wave of transition brings along course, a green movement of eliminating carbon discharge to the atmosphere. A movement, some experts say, is more focused on elimination than on developments. Eliminating fossil-based energy rather than exploring technologies to reduce the carbon emissions.
One can also argue that this energy transition makes a case to dichotomize the International Energy industry to include new entrants from the alternate (Water, Wind, Solar, Biomass, etc.) renewable sources by year 2050.
With the world population hyped to grow to 9.9Billion by this projected date, a correspondingly more demand for energy and advancement is anticipated and not the reverse. This certainly is a big market for very many players.
ON EMERGING ECONOMIES
An emerging economy is one with slightly lower industrial development with low human development indices (of Education, per capital income and life expectation) when compared to “developed” countries. A 2021 New York times report titled “The Big Ten”, listed Mexico, Brazil, India, Argentina, South Africa, Poland, Turkey, India, Indonesia, China, and South Korea as world’s emerging market. In sub-Saharan Africa, emerging markets are Botswana, Ghana, Kenya, Mozambique, Nigeria, Tanzania, Uganda, and Zambia according to the IMF.
These economies have an increasing reliance on industrialization, characterized by a high-risk, high-return opportunity for investors. From a transition perspective, these economies need energy to become industrialized.
ONE GOAL. DIFFERENT PROCESS
In many ways, there are no differences between the energy transition in developed and developing economies: both will rely on similar technologies and are likely to be enabled by a mix of market forces and government regulations.
From another angle, resource availability remains vastly different. Emerging economies are more limited in resources to devote to the transition agenda. From this view, the transition is quite different.
The institutional and market context is likely to be different as well: transparency, rules, decision making, and dispute resolution are all preconditions for investment, and their presence in emerging economies will vary. There is a dependence on developed country resources, and a possible carrot vs stick partnership if not equitably managed.
Can emerging economies grow while reducing their greenhouse gas emissions, either on an absolute basis or against some business-as-usual baseline? What is the immediate impact of decarbonization and leverageable opportunities? How has developed nations managed to make progress in reducing (eliminating) emissions while still meeting societal expectations for development? What are the trade-offs?
ENERGY CONVERSATIONS
Discussions on countries transiting to less carbon intensive energy sources have been gaining momentum in the last couple of years, with world leaders advocating for a shift away from fossils as a critical strategy in mitigating the global climate crisis.
The clamor to emphasize only renewable energy as the sole pathway to energy transition is a source of concern for emerging countries that are still working to achieve base load industrialization, address energy poverty and ensure reliable power supply.
Net zero-emission does not mean carbon is not emitted. It instead means there exists the capacity and technology to capture, store and utilize the carbon produced. Net-Zero emission mean “Amount of carbon emissions = Amount of carbon captured / stored/Removed”,
The cost of energy counts too. Presently, renewables can’t compete with fossil-based systems. With energy demand increasing and the fossil resource horizon shortening, energy prices will increase, favoring renewables. Renewables, however, have different characteristics. For one, the ratio between investment cost and operating costs is radically different.
FOR NIGERIA
As a nation, Nigeria, as well as other emerging economies requires fossil fuel as their base load energy source. These resources are ticket to alleviating energy poverty, one of the United Nations’ Sustainable Development goals.
There is a need to create more avenues for gas utilization and increasing the demand for gas and its’ derivatives. Nigeria’s agenda in developing a gas driven economy can only be achieved with a focus on gas gathering, processing, and delivering pipeline network of infrastructure to take gas from the well head (upstream) down to the end users- which in this case could be industrial parks or clusters, commercial and residential buildings etc.
The policy of auto conversion to run on gas as against premium motor spirit (gasoline) or Automotive Gas Oil (AGO) otherwise known as diesel also provides a bigger utilization avenue. These should be implemented and sustained.
The implementation of this process could be phased – starting with fleet of interstate high-capacity vehicles for a pilot phase. Gather data, review, analyze, study, interpret, capture lessons learned and use the knowledge to optimize the next phase roll-out. Incentives should be in place to encourage fleet owners and individuals to participate in the program until such a time market penetration and reasonable market share are achieved. Thereafter, there could be gradual withdrawal of such incentives. However, we must not lose sight of the global electric vehicle growth and energy market.
There is a need for a legislative policy framework that will integrate gas piping into the commercial and residential real estate development planning to encourage the use of gas just like what is obtainable in the developed countries. This is not rocket science. All that is required is discipline, conscientious planning, dedication, political will, and commitment to actions plus a stronger will to deliver the country out of socio-economic darkness.
The impact of the climate change is being felt globally by both developed and developing countries and according to the Centre for Strategic and International Studies report, “We must move away from an idealized version of the world—a model-generated pathway from here to “net-zero” that works on paper but not in practice”.
Policy and Governance institutions of Emerging Economies must act on deliberate programs of producing pro-climate innovation to deliver on industrialization programs and alleviate economic poverty.
About the Author
Tunbosun Afolayan is a Certified Petroleum Geologist and Energy Communications thought leader. She holds Post graduate degrees in Business Management, Entrepreneurship & Leadership, and Energy & Sustainability. She is the current Publicity Secretary of the Nigerian Association of Petroleum Explorationists and a Board member of the American Association of Petroleum Geologists, Division of Professional Affairs.
