Harmonisation of global energy and climate
governance regimes could be achieved by a
long-term agenda under the auspices of the G20,
beginning with the alignment of international
organisation mission statements. This requires
steps to build the G20’s leadership and oversight
function by establishing a long-term series of
G20 energy ministerial meetings and building an
energy secretariat function.
1.2 Investment Regimes
for a Low-Carbon,
Energy-Secure Transition
Allocating investment during a swift energy
transition, while maintaining oil and gas supply
security and reliability of electricity networks,
requires clear market signals and the incorporation of transition risks into the cost of capital.
However, the global coverage and level of carbon pricing are insufficient, fuel subsidies distort
investment decisions, and transition risks are
poorly understood by capital markets.
As significant heavy industries embark on
domestic carbon pricing, it is in all countries’
interests to ensure a level international playing field
through the widespread adoption of carbon pricing
elsewhere. And it is in all countries’ interests to
ensure sufficient global investment in hydrocarbon
exploration and development through the transition, in particular to avoid supply crunches.
International momentum to propagate carbon
pricing and improve the incorporation of transition risks into financial decision-making is
growing. G20 states collaborate with each other
to support the development, adoption and
implementation of the recommendations of the
Financial Stability Board’s Taskforce on
Climate-related Financial Disclosures. G20 states
continue to support the phase-out of fossil fuel
subsidies and work through multiple channels to
promote carbon pricing through lesson sharing,
clarify regimes for linking markets under the
United Nations Framework Convention on Climate Change, and explore the use of border
adjustment measures to encourage wider adoption and reduce leakage.
1.3 Security of Supply of Metals
and Minerals for Future
Energy Systems
Concerns are growing about the security of
supply of metals and minerals critical to the
manufacture of technologies and infrastructure
for future energy systems. Compared to markets
for oil and gas or agricultural commodities,
markets for metals and minerals have poor
information and weak governance.
Secure supply of affordable raw materials will
be crucial to the economic security of all
countries.
Supply chain shortages and trade disputes
could be avoided by countries working together
to improve information, data and price transparency across the supply chain, while also
supporting dialogue and developing win-win
technology and investment packages with existing, new and emerging producers to encourage
trade and prevent export controls.
Circular economy strategy could also help
reduce the long-term import needs of these critical materials. There should be greater focus on
research, development and demonstration
(RD&D) of enhanced recovery and recycling of
metals and minerals from in-use stocks, enabling
the greater use of secondary materials.
Reducing reliance on critical metals and
minerals could be furthered by forming unconventional alliances with regional neighbours to
support RD&D of substitute technologies for
those low-carbon energy technologies most
dependent on critical metals and minerals.
1.4 Electricity Reliability During
the Shift from Molecules
to Electrons
Steep reductions in the cost of clean energy
technology are accelerating the shift from molecules to electrons. The nature of energy security
is therefore also changing, not least because an
electricity-focused energy system requires
real-time management for system reliability.
Interconnection of national electricity grids can
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W. Jigang and P. Webb
governance regimes could be achieved by a
long-term agenda under the auspices of the G20,
beginning with the alignment of international
organisation mission statements. This requires
steps to build the G20’s leadership and oversight
function by establishing a long-term series of
G20 energy ministerial meetings and building an
energy secretariat function.
1.2 Investment Regimes
for a Low-Carbon,
Energy-Secure Transition
Allocating investment during a swift energy
transition, while maintaining oil and gas supply
security and reliability of electricity networks,
requires clear market signals and the incorporation of transition risks into the cost of capital.
However, the global coverage and level of carbon pricing are insufficient, fuel subsidies distort
investment decisions, and transition risks are
poorly understood by capital markets.
As significant heavy industries embark on
domestic carbon pricing, it is in all countries’
interests to ensure a level international playing field
through the widespread adoption of carbon pricing
elsewhere. And it is in all countries’ interests to
ensure sufficient global investment in hydrocarbon
exploration and development through the transition, in particular to avoid supply crunches.
International momentum to propagate carbon
pricing and improve the incorporation of transition risks into financial decision-making is
growing. G20 states collaborate with each other
to support the development, adoption and
implementation of the recommendations of the
Financial Stability Board’s Taskforce on
Climate-related Financial Disclosures. G20 states
continue to support the phase-out of fossil fuel
subsidies and work through multiple channels to
promote carbon pricing through lesson sharing,
clarify regimes for linking markets under the
United Nations Framework Convention on Climate Change, and explore the use of border
adjustment measures to encourage wider adoption and reduce leakage.
1.3 Security of Supply of Metals
and Minerals for Future
Energy Systems
Concerns are growing about the security of
supply of metals and minerals critical to the
manufacture of technologies and infrastructure
for future energy systems. Compared to markets
for oil and gas or agricultural commodities,
markets for metals and minerals have poor
information and weak governance.
Secure supply of affordable raw materials will
be crucial to the economic security of all
countries.
Supply chain shortages and trade disputes
could be avoided by countries working together
to improve information, data and price transparency across the supply chain, while also
supporting dialogue and developing win-win
technology and investment packages with existing, new and emerging producers to encourage
trade and prevent export controls.
Circular economy strategy could also help
reduce the long-term import needs of these critical materials. There should be greater focus on
research, development and demonstration
(RD&D) of enhanced recovery and recycling of
metals and minerals from in-use stocks, enabling
the greater use of secondary materials.
Reducing reliance on critical metals and
minerals could be furthered by forming unconventional alliances with regional neighbours to
support RD&D of substitute technologies for
those low-carbon energy technologies most
dependent on critical metals and minerals.
1.4 Electricity Reliability During
the Shift from Molecules
to Electrons
Steep reductions in the cost of clean energy
technology are accelerating the shift from molecules to electrons. The nature of energy security
is therefore also changing, not least because an
electricity-focused energy system requires
real-time management for system reliability.
Interconnection of national electricity grids can
592
W. Jigang and P. Webb