The world has been turned on its head in less than a year with geopolitical uncertainty forcing a rethink on multiple fronts. All too often it has involved weakening ambition in transitioning to economies with sustainability and clean energy at their core.
The second coming of Donald Trump at the helm in the United States, coupled with ongoing conflict in Ukraine and the Middle East, has made policy shifts inevitable and often prudent. This is particularly true when it comes to ensuring energy security at a reasonable cost, both in Europe and especially in Ireland.
But when policy changes are adopted that are merely transactional or on a whim and not based on scientific evidence, ultimately everyone loses. Then Planet Earth continues to experience human-induced global warming and appalling loss of biodiversity – despite 55 per cent of global GDP being dependent on nature.
These are the circumstances the fossil fuel sector exploits to lock in their powerful position for coming decades despite extraction of oil and gas becoming the costliest options compared to solar and wind. Big Oil is also pushing its case to meet rising demand for electricity being fuelled by AI, data centres and, ironically, the greening of transport with EV scale-up and adoption of heat pumps in homes and buildings.
The world’s appetite for energy rose faster than usual last year because record high global temperatures meant more power was used for cooling, underscoring the vicious cycle between climate change and energy use, according to the International Energy Agency.
Meanwhile the world is far off meeting Paris Agreement targets. Carbon emissions keep rising even as climate harm worsens everywhere, and yet some countries are reverting to coal use. Gas including LNG has become the comfort blanket when it comes to ready availability of energy. Each delay makes decarbonisation more expensive, denying consumers the multiple benefits of cheaper energy, cleaner air and a healthy environment.
What is particularly hard to reconcile is the many corporations and banks who not so long ago were championing their sustainability credentials; many have done a quick about turn, some even abandoning their ambitions for net zero emissions by 2050. The softening of climate goals by European giants Shell and BP is the most cynical play in this regard.
Rowback is epitomised in the view that national and corporate targets are hard to achieve in the real world. Some will use that excuse to revert towards laggardism.
The problem was highlighted by S&P Global Community Insights in its assessment of 2025 energy demand: while it notes the supply of clean energy is growing faster than it ever has in history, it states it is “not yet fast enough to curtail the growth in fossil fuel demand, let alone displace existing fossil fuel consumption.”
Meanwhile there is pressure on the EU to roll back its sustainability regulations in response to US deregulation and to curb its green agenda, especially given the likelihood of a trade war. National governments and big business in Europe claim EU rules stifle investment and competitiveness.
Yes, simplification will help companies build competitive advantage based on sustainable investments. But as Maria Mendiluce of We Mean Business Coalition noted in a letter to the Financial Times recently: “Deregulation should not enable companies to invest in outdated, polluting technologies that ultimately harm EU competitiveness.”
The bottom line is markets increasingly reward firms that embrace responsible practices, she added, and EU regulations can make Europe a more attractive market for new clean investments that bring growth and jobs.
The worsening economic outlook and uncertainties should not prompt the Government to ease its climate ambitions, especially in adopting renewables. It should strongly back the EU target of a 90 per cent cut in emissions by 2040 and remove blockages to scale up of offshore wind. It needs to get as close as possible to meeting 2030 targets, otherwise intolerable compliance costs loom when strong year-on-year economic growth is over.
Just because climate action, addressing nature loss, and genuine promotion of equality and diversity are less politically fashionable, it doesn’t mean they are less urgent. The case for genuine sustainability and circularity is clearcut.
In a world changing faster than ever, it is important not to lose sight of the risks while keeping focus on opportunities – as outlined in this latest issue of Sustainable Ireland. They are the essential link to the long-term resilience of businesses and wider society.
