Wealth creation, energy demand and CO2 emissions continued even through 2018, building on the trend of the previous year. With every day that passes, the problem of reducing emissions becomes more urgent and its complexity more evident. A complexity that began to emerge at the very beginning of annual emission measurement but that does not offer a holistic rendering of the phenomenon. Indeed, to achieve effective international concertation other angles need to be considered, such as per capita and historic emissions, and those resulting from national dependency on foreign markets.
The only solution is to join forces and enhance the role the “oil majors” can play in the transition in terms of both creating wealth (to be used also to propel the transition) as well as direct investments in de-carbonization. Crucial over this long phase will be the role of gas and, therefore, the advancement of measures in support of national production.
The magnitude of the energy transition is such that a substantial rise in sector investments is expected even though, in reality, these are practically at a standstill at global level. It seems that uncertainty about traditional sources is offsetting yields that appeal to investors who usually hesitate when it comes to normally lower-return alternative sources. The task of the European Union should be to regulate that mechanism in such a way as to compensate lower returns on investments in de-carbonization.
Also important is the role that major oil-consuming industries can play in steering the country toward de-carbonization by using more efficient processes and advanced technologies. Since Europe has some of the highest environmental standards, defending the European industrial system is also an effective way of protecting the environment.
In Italy, that strategy is outlined in the National Energy and Climate Plan. While historically the country has made substantial leaps in the area of de-carbonization, it is also true that the 2030 objectives are particularly ambitious, especially as regards the increased use of renewable sources, which should be capable of attracting considerable investments. Growth is also predicted in the fossil fuel sector, with the goal of a 5% reduction in dependence on foreign markets.
Contradictory therefore is the attitude of those decision makers who seem to be obstructing any development of traditional energy sources, which satisfy more than two-thirds of national energy demand. The existing energy policy problem is reflected in the nation’s competitiveness with other European countries – not being considered is the fact that producing less does not mean consuming less but importing more, which precludes the full development of Italy’s potential role as a Mediterranean energy hub.
The other indispensable actor – the citizen/consumer – appears to be increasingly aware of climate problems, but is not sufficiently informed in terms of the significance, timeframes, mechanisms and costs of the transition. Indeed, not a single investment in alternative energy infrastructure over the past 20 years has gone uncontested. The issue of consensus cannot be ignored, but the institutions that should be addressing it should focus less on regulation than on culture.
Important choices call for credibility and skill, especially since time is running out. As far off as it may be, the global carbon tax could be an effective solution. The Power Purchase Agreement system at European level could truly be the key to making investments in renewables profitable and therefore feasible combined, in turn, with a solid system of infrastructure and traditional energy production.