The World Economic Forum (WEF) warned in its latest report that the world is facing a difficult scenario, in the midst of a systematic transformation driven by the usual changes.
(See: Aciem stresses the urgency of increasing gas imports in the event of a deficit)
In general terms, WEF founder and CEO Klaus Schwab said that despite the difficult times the world is facing due to conflicts, economic volatility, among others, Currently, five transformative changes can be identified.
One of them is based on the rapid transformation that the industrial era is undergoing.characterized by mechanization and mass production. In this, artificial intelligence, machine learning and digital technologies drive unprecedented advances.
(See also: What has happened to the implementation of energy communities?)
While this transformation is revolutionizing industries, improving productivity and fostering innovation, They also require new skills, regulatory frameworks and ethical considerations to ensure that technology benefits everyone.
On the other hand, the document addresses the geopolitical panorama that the world is facing in a unipolar scenario where it is dominated by a single power, transforming into a multipolar reality with multiple influential nations.
(Read: Without a transition plan, they warn of risks to energy security)
“This transition brings with it opportunities for diversified global cooperation and challenges arising from heightened geopolitical tensions. Balancing national interests with global stability requires nuanced diplomacy and international collaboration.“,” Schwab says.
Energy transition
iStock
Now, based on economic indicators, the WEF highlights the transformation towards a green economy taking into account that climate change and Environmental degradation forces us to rethink this aspect from a more sustainable perspective.
(Read more: Comptroller warns of ‘non-existence’ of a unified energy security policy)
This involves adopting a series of more sustainable practices, reducing carbon emissions and promoting renewable energy sources, in a joint effort between governments, companies and society itself.
In a fourth point, the president of the World Economic Forum stressed the issue of demographic changes moving from a young world to an aging one. This affects labour markets, health care systems and social security structures.
And the fifth transformation is social polarization and the rise of misinformation. According to Schwab, societies are experiencing a polarization that It manifests itself in cultural, political, ideological and social divisions.
(See: Energy mining sector: progress and decisions that have not been made in two years)
“It is necessary to foster inclusive dialogues, promote mutual understanding and create environments in which different opinions and identities can exist in harmony.“, he says.
Energy transition
iStock
Progress on climate change
The World Economic Forum report revealed that a large part of the funding between 2023 and 2024 was for sustainable solutions. In this regard, it was recorded that so far US$130 billion of private capital has been committed to achieve the goal of net zero emissions.
(See also: Tax reform and more urgent actions to address energy policy challenges)
However, they say that the decarbonisation solutions needed for the transition to hard-to-abate sectors are not sufficiently funded. An example of this was given by Borge Brende, chairman of the WEF board of directors, who said that the transition to clean energy in the global south requires US$2 billion in funding per year.
“This initiative aims to mobilize the capital needed to support the adoption of early-stage technologies that support the transition to net-zero emissions. It aims to engage financiers across the investment value chain, as well as energy, industrial and mobility companies, to drive three major shifts:”, they indicate.
(Read: How could the development of green hydrogen be financed in Colombia? This is what they propose)
Energy transition
iStock
The first of them is to improve the offer, financing structures and risk reduction mechanismswhich should be designed to demonstrate the commercial and financial viability of decarbonisation projects.
(Read: Financing for the energy transition could put pressure on Ecopetrol’s rating)
Another point is the need to increase the demand for solutions that can be achieved by identifying and using the power of financial institutions to support companies and their purchasing power around the decarbonization solution.
And finally it is raised enabling investment by creating an enabling space for those responsible for sustainable policies in countries.
It should be noted that according to the president of the WEF board of directors, in terms of climate action the coalition of First Drivers is growing and It has nearly 100 companies and 13 government partners representing 50% of global GDP. These players are thus generating early market demand for clean energy technologies to catalyse their commercial adoption.
(See more: Moody’s warns of the need to diversify the electricity matrix and the effects of not acting)
Energy transition
iStock
Complex environments
During 2023, according to Brende, The world was permeated by the most complex geopolitical and geoeconomic events in decadeswhich makes the Forum’s mission of building and strengthening partnerships among multiple interested peers vital.
“The downturn in geopolitical cooperation came at a time when the urgency for the parties to work together to resolve shared challenges continues to grow.”, he highlights.
(Read: Energy transition warned of ‘disorderly’ amid record fossil fuel use)
Additionally, he mentioned that last year was the hottest on record, economic growth, although positive, is projected to be historically low and the number of people affected by violence has risen to record levels. At the same time, cutting-edge technologies offer the possibility of huge gains, “But this potential must be harnessed responsibly.“, he says.
