The current shift from fossil energy resources to “green” energy — renewable energy plus storage in smart grids, many with electric vehicles providing grid services — is now a global phenomenon (International Energy Agency 2016; International Renewable Energy Agency [IRENA] 2017b).
For economic reasons, this energy transformation has become self-sustaining and self-accelerating where it is under way, and self-replicating in an increasing number of countries and regions, including in poor areas and remote locations not yet served by a power grid.
Energy transformation toward 100% renewable energy is desirable and inevitable.
New energy systems, based on efficiency, renewables, storage and smart management, are cheaper to build, run and maintain. They harvest free environmental flows, often for self-consumption.
Fossil fuel extraction and commodity trade will end, as fossil asset values erode in a shrinking sector that loses its role in capital formation, international trade, economic activity and government revenue.
Energy transformation is beneficial overall, and yet it may produce misleading signals in outdated statistics. International organizations and the Task Force on Climate-related Financial Disclosures (TFCD) should address this paradox in joint reports to the Group of Twenty (G20) leaders, ministers of finance and central bank governors.
Policy Brief No. 109
Centre for International Governance Innovation 2017