Why is it the world’s two largest economies have failed to provide climate leadership?
According to the MIT Technology Review Insights- The Green Index report for 2022 has the US at 21, ranking up from last year’s 40th position. Similarly, China’s rank is 26 in 2022, up from 45 last year. Iceland, Denmark, and Norway hold the top three positions.
The world’s global economy is built on energy produced from fossil fuels. As the world understood that climate change is rapid, a consensus emerged: it should transition away from fossil fuels and re-build the world again on low carbon fuels.
US and China are giant economies built on fossil fuels., Transitioning these economies from coal and oil to renewables and green hydrogen without disrupting people’s way of life in these countries will take longer compared to smaller European economies.
The carbon economy of yesteryear and today has, over time, built vested interests that profited from carbon-based energy-produced goods and services. Persuading vested interest to decarbonize their business will happen when customers pressure and force the transition.
US and China have two diametrically opposite development and political models. Both are facing internal resistance to making a rapid transition. Low carbon energy solutions must be cost-competitive for businesses and consumers to accept the change.
This week, the first shipment of green hydrogen was exported from Australia to Japan. It is a giant step in the energy transition. But for it to speed up, the cost of producing green hydrogen has to come down rapidly.
The faster cost-competitive alternative solutions emerge, the quicker the pace of change will be. The Ukraine conflict, the breakdown of supply chains, and the skyrocketing oil prices will aid the transition to a greener world.
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