As the war in Ukraine continues to rage, skyrocketing energy prices are compounding an existential cost-of-living crisis for hundreds of millions of people, warned the UN Secretary-General’s Global Crisis Response Group (GCRG) on Food, Energy and Finance.
espite this alarming situation, major oil and gas companies recently reported record profits, which Secretary-General António Guterres, who launched the brief today, called “immoral.”
The combined profits of the largest energy companies in the first quarter of this year are close to US100 billion. I urge governments to tax these excessive profits, and use the funds to support the most vulnerable people through these difficult times
The GCRG’s third brief recommends that governments find the most effective ways to fund energy solutions, such as publicly funded cash transfers and rebate policies, to protect vulnerable communities everywhere, including through windfall taxes on the largest oil and gas companies. At the same time, the brief urges a transition to renewables.
The brief makes it clear that the war in Ukraine and the global energy crisis that it has caused is a stark reminder of the need for energy resilience and stronger push for the transition to renewable energy.
However, to accelerate the transition, and as outlined by the Secretary-General, policies, including social protection measures for those affected by the transition, technology, subsidies, investments and materials to support renewables need to be in place and readily available.
The brief stresses that any short-term policies and protection measures must help mitigate the crisis, including efforts to promote energy efficiency and demand reduction, and not exacerbate it, such as blanket subsidies for fossil fuels.
In the medium-to-long-term, the world needs to double down on renewables to meet net-zero goals, tackle energy poverty, and boost and diversify the global energy mix. To that end, the brief calls for the need to significantly increase global investment.
Renewable energy is often the cheapest, and most quick to deploy source of electricity for many countries. But this is only true if we ensure that supply chains work well and without bottlenecks; that the workforce has the right skills and that enough funds will be made available for the initial investments
said Rebeca Grynspan, the Secretary-General of the UN Conference on Trade and Development (UNCTAD), who coordinates and leads on the development of the GCRG’s briefs.
“To meet these conditions we have to scale up financing and technology transfer for the developing countries and the energy poor of the world,” she added at the launch.
According to the brief, an ambitious renewable energy transition, that includes skills training, could create an additional 85 million jobs in renewable energy sources, efficiency, and other energy transition-related sectors by 2030.
Moreover, renewable energy production is often the least-cost energy production source with the shortest installation times, and provides countries with energy security, reducing future exposure to the volatility of oil, gas and coal prices.