Energy sector emissions account for more than two thirds of greenhouse gas emissions and must significantly decrease these to help combat climate change while meeting rising energy demands.
Fossil fuels like coal, oil and natural gas contribute to climate change by trapping solar heat in the atmosphere and holding back solar radiation from reaching Earth. Clean renewable sources must replace fossil fuels.
What is climate change?
Climate change refers to long-term shifts in temperature and weather patterns that occur over a longer timeframe. While climate change can be caused by natural events like changes in the Sun’s activity or large volcanic eruptions, human activities (primarily burning fossil fuels ) are currently the main driver – greenhouse gases produced from burning fossil fuels acts like an invisible blanket which traps solar radiation heating up Earth faster than before and warming our planet at an unprecedented pace. Although climate change has always occurred over time, its pace now seems accelerated significantly faster than before.
As the climate continues to alter, global average temperatures are increasing while weather patterns become more extreme. These changes may affect various aspects of life such as crop production, snow and ice coverage on Earth, sea levels and frequency and intensity of storms; and could have long-term negative consequences on human health, water quality and energy availability.
Though the science is clear on the causes of climate change, its impacts remain uncertain due to unpredictable natural influences like volcanic eruptions or feedback mechanisms which dampen or reinforce disturbances to climate systems; and unknown factors which impact how fast Earth will warm as a result of particular emissions pathways.
Already the world is witnessing some of the effects of climate change, with record floods, intense storms and deadly heat waves becoming ever more devastating. These effects are being felt globally but particularly by communities and regions who contributed minimally to its cause – specifically communities of color and economically vulnerable groups who may be particularly exposed to its harmful impacts due to limited capacity to take preventative steps against it.
Climate change impacts are having an immediate and direct effect on energy demand, supply, and infrastructure. In the US for instance, sea level rise threatens many coastal power plants while severe storms have the potential to destroy energy infrastructure such as railways and oil and gas pipelines. Furthermore, declining glaciers and snowpack reduce hydropower potential. Many risks can be managed through careful site selection or technical adaptation but some infrastructure components could become unusable or obsolete as a result of climate change, including coal and nuclear plants.
What is the energy sector?
The energy sector is an enormous global industry that produces, transports and sells energy in the form of fossil fuels (like oil and coal) or renewables. Companies involved with extracting energy sources as well as powering economies make up this vast sector.
There are various strategies available for investing in the energy sector, from exchange-traded funds (ETFs) and individual stocks to investing in whole companies. When making any decision about investment options in energy companies it is crucial that you know your risk tolerance and understand what you are getting into before taking a leap of faith into this investment field.
Energy is vital to our economy and everyday lives; from powering homes, factories and offices to transportation and agriculture. Without energy we would struggle to exist.
Unfortunately, the energy sector contributes significantly to climate change through production and use of fossil fuels. But there are many ways that energy production and usage can have less of an effect on the environment.
An increase in electricity generation and transmission efficiency can reduce greenhouse gas emissions while improving air quality and increasing energy security, and it can minimize impactful shocks for consumers by decreasing energy-related shocks.
Energy companies can also play a vital role in combatting climate change through providing climate services. This means providing decision makers with relevant data and providing support in making low-carbon, resilient choices. Although most WMO Member States already offer climate services to the energy sector, there remains much room for improvement.
The energy sector can make an immense contribution to global sustainability while simultaneously having an enormous effect on business operations and profits. To remain viable, however, the industry must balance supply and demand effectively as well as devise climate-resilient strategies while at the same time cultivating highly skilled workers as part of an inclusive workforce and lead the clean energy transition.
What can the energy sector do?
Energy sector actors can play an integral part in combatting climate change by increasing renewables use, decreasing fossil fuel usage, and improving efficiency at existing facilities. This will be essential in reaching 1.5degC warming limit while at the same time ensuring no one is left behind during a just transition to clean, secure, affordable energy solutions.
Energy companies should invest in resilient and responsive energy systems that can better withstand climate change impacts, supporting research, development and deployment of technologies that reduce air pollution and greenhouse gases, building skilled workforces by partnering with universities to create new curricula; offering PhD scholarships; supporting internships and apprenticeships as well as developing high demand skills such as engineering, IT and economics.
As well as investing in zero-carbon technologies such as solar, wind, hydroelectricity, biomass and tidal power plants to drive down greenhouse gas (GHG) emissions, energy firms can also assist in driving down GHG emissions by supporting policies that decrease them; for instance by setting ambitious 2030 targets for electric vehicle ownership and international shipping and by targeting potent climate pollutants like methane while speeding up phasedown of HFCs under Kigali Amendment.
Finally, the sector can ensure climate change and energy issues are considered in all decisions by making environmental analysis an integral component of every project. This will be crucial in both assessing climate change’s effect on energy networks as well as building resilience against potential climate impacts that might disrupt supply or demand of energy in certain regions.
Energy companies can work alongside governments and NGOs to mitigate climate change risks in their operations, by including climate considerations into project planning and investing in services to enhance weather and climate data and forecasts. Climate risk assessments could become part of risk management processes for all investments in energy infrastructure investments as well as helping vulnerable countries build climate information capacities, such as supporting long-term regionally specific climate services.
What is the solution?
Energy production accounts for two-thirds of global greenhouse gas emissions, so we must significantly decrease its output in order to avoid dangerous climate change and guarantee a reliable supply of energy for all people. The coronavirus pandemic inspired an upsurge in renewable energy and energy efficiency; but global leaders need to speed up this transition for it to be sustainable and resilient against climate change.
Key steps include shifting from fossil fuels to clean energy sources, improving existing infrastructure resilience, and investing in innovative new technologies – all combined into an inclusive global energy network that meets all energy demand without contributing to climate change.
To achieve this goal will require an urgent switch away from coal, oil and natural gas towards renewable energies such as wind, solar, biomass hydroelectricity, geothermal energy and tidal/wave power generation. Furthermore, developing advanced batteries, smart grids and other technologies that make these investments more cost-effective is also a necessity if the global energy sector and economy are to remain viable over time. In total this multi-billion dollar investment is necessary for long-term viability and global economic prosperity.
Businesses, governments, and others are taking multiple actions to bolster the resiliency of energy systems against climate change. For example, they invest in upgrading and protecting existing infrastructure while using innovative technologies to reduce pollution levels and greenhouse gas emissions. They are also working toward expanding renewable electricity production capacity while simultaneously improving energy efficiency across sectors.
Energy companies must acknowledge how climate change is altering their industry in unexpected and unprecedented ways. Extreme weather events like heat waves and droughts can wreak havoc with energy production, closing plants and transmission lines; interfering with oil and gas deliveries; as well as creating electricity shortages or price spikes. Climate change threatens energy sector profitability, impacting consumers as well as the wider economy. To mitigate this risk, leaders within this industry should incorporate its impacts in planning and investment decisions; making use of knowledge on its effects as an aid for decision making; including them within internal assessment models as well as risk management procedures to better inform decisions made within this industry.
