The notion of ‘transition’ has become a pivotal one within both the world of climate action and, increasingly, development more generally. And in terms of finance, ‘transition finance’ couples the two, uniting climate finance with traditional forms of development aid. But it is an inherently complex idea, especially in terms of practical execution.
Too much of the discourse around ‘transition’ is glib to the point of rendering the concept devoid of all useful meaning. Transitioning to a Prosperous, Resilient and Carbon-Free Economy: A Guide for Decision-Makers sets out to avoid this trap by getting into the granularity of what exactly a transition means for particular sectors, and it partly succeeds in doing so.
I say ‘partly’ because this volume, despite its compendious scope and overall length – all 667 pages of it – has a few interlocking blind spots, which I will come to. First, however, a look at the strengths, such as the positive and even optimistic perspective that is offered: the science and knowledge are in place, as the contributions to this book amply illustrate. What is needed – and these are my words, not necessarily those of the authors or editors of the volume – is the commitment of resources and political will to make it happen.
The foreword by former Australian Prime Minister Malcolm Turnbull is breathlessly optimistic about not just the potential of the transition but the ease with which it can be achieved. ‘We can have our cake and eat it’, he argues, on the basis that because of science it is possible to ‘rapidly transition to a world where energy is both much greener and cheaper’.
This, to Turnbull’s mind, solves the fundamental conundrum, which certainly is a valid one, namely: that taking action against global warming has often pitted the interests of today’s generation against those of future generations.
This leads one to an early criticism of the book’s approach: that it underplays the complexity of the undertaking. In the introduction, the editors write that ‘[t]he challenges are daunting but are surmountable with existing technologies and systems’. Yet, neither those framing the book nor many of the individuals writing the chapters troubled themselves with outlining the depth and character of this ‘daunting challenge’, which may, to some readers, undermine the strength of the arguments and evidence presented. Are they fit for purpose? Can they achieve the transition that is so clearly and urgently required?
It is interesting to note that Turnbull’s positive take is founded on the energy transition. And, indeed, clearly the energy transition is the most important element of the discussion, so it is not surprising that the volume begins with discussion of the energy sector. The first seven of the nineteen substantive, sectoral chapters – the great majority of which are from Australian academics or policy wonks – are devoted to various aspects of the energy sector transition, from an overview that justifiably frames the sector’s transition as a ‘litmus test’, to chapters on wind, solar, nuclear, hydro and hydrogen power, as well as a chapter on solutions to the problem of energy storage.
The chapter on ‘the hydrogen economy’ is interesting to any economy that is, like South Africa, seeking to develop ‘green hydrogen’ (although this volume does not use this expression). As the chapter makes clear, hydrogen is a technology whose potential as a high-density, alternative energy source has not been realised and that now, to do so, would require new technological developments to ensure that it can escape its current fossil fuel-based source. Helpfully, the chapter indicates that there are plenty of uncertainties about whether this can be successfully achieved, taking into account other considerations, such as safety in transportation. Less helpfully, it does not provide a ‘guide’ as to how to overcome these obstacles.
To be fair to the editors, having moved on from the energy sector and traversed cities and industry, as well as a couple of chapters on ‘example economics’ including a useful country-focused case study on Indonesia, the final section of the volume attempts to tackle four barriers to change – trade, finance, governance, and social movements.
The first barrier draws attention to an issue whose importance to securing a rapid, global economic transition is not widely understood. International co-operation is essential if goods and services are to be traded across borders in support of the different kinds of transitions. Since much of the volume was written, apparently, in 2019 and certainly before the Russian invasion of Ukraine added a dangerous level of distraction to geopolitics and threatened to unravel the current form of globalisation, this concern seems an even greater one now.
The chapter on finance is wholly inadequate. This is not because it is poorly researched or written or argued – none of which applies – but rather because the subject of how to achieve an economic transition of the scale that is proposed in this volume, and which humanity urgently needs, is vast and complex. Moreover, it needs its own specificity and granularity: How much investment is needed? What is the bottom line? Where will it come from and how will it be accessed, and on what terms? The international climate finance package of $8.5bn that has been assembled as a contribution to kick-start South Africa’s just energy transition, and which is being seen as a prototype for other countries such as Indonesia, is relevant here – and came about after this volume was compiled – not just because of what it tells us about the possibilities (and limitations) of international climate finance but also about the gap in finance needed. The $8.5bn represents only about one-tenth of the finance and investment that South Africa will need by 2035 to support its planned just energy transition.
The chapter on governance is well-intended and substantively correct in identifying not just corruption as a major risk to a well-ordered and urgent economic transition but also the main areas of governance that require attention. But this is a deeply complex subject all on its own, and so the chapter comes across as rather superficial and flimsy; it requires a far deeper analysis of how to protect transition strategies from different forms of vested interest and corrupt practice – something that each and every country will have to navigate depending on the particular character and strength of its democratic institutions and civil society.
This takes us back to politics. I do not know if the choice of Turnbull to write the foreword was deliberately ironic, given that the volume repeatedly argues that the transition should be insulated from politics. The chapter on energy transition, for example, argues that ‘[a]t the highest level, a robust array of non-political meta-governance and governance structures is required to facilitate the transformation of the energy sector to new low carbon technologies’. This is but one of many such calls for the ‘insulation’ of the transition from politics. But this is wholly unrealistic: nothing could be more political than an economic transition, especially when it is so obvious that – as the book concedes elsewhere – there will be losers as well as winners unless great care is taken.
The ‘great care’ will be secured not by technocrats, but by politicians, whose job it is to manage interests and navigate a journey that will require sufficient public support for it to be legitimate and plausible. I do not intend to offer an ‘ode to politicians’ in response to a technocratic take. Far from it: I well understand why the authors of a book such as this would want to protect the integrity of a long-term structural shift in the economy from the vagaries, not to mention vested interests and likely corrupt tendencies, of short-term political attitudes and action. But, to pretend that such an inherently political subject can and should be removed from the political sphere is naïve and counter-productive.
This, then, is a blind spot. But then this is a book by technocrats for technocrats. Political economists – and possibly progressive democrats (and certainly, of course, climate change-denying authoritarian populists, for other reasons) – will probably be somewhat frustrated by it. The cartography of the contributions to the book is clearly technocratically sound, but the pathway remains precarious because, for all of the compelling science, there remains no guarantee that it will be taken because the political economy considerations are so ruggedly treacherous.
Speaking of challenging political economy, South Africa has embarked on its own ‘just energy transition’ – or ‘JET’ as it is often referred to. There is a framework for the JET, the product of almost two years of initial work by the admirable Presidential Climate Commission (PCC), who managed to secure a sufficient consensus in favour of the JET despite the obstructionism of powerful vested interest actors, not least reportedly the Minister of Energy, Gwede Mantashe, who is also chairperson of the country’s ruling party, the African National Congress (ANC).
South Africans can benefit from this book, as can policymakers, journalists, thought leaders, activists and think-tanks across the world – although its price and size may prove to be an insurmountable obstacle for many; perhaps the publishers, Cambridge University Press, and the volume’s editors will find a way to provide affordable access or to publish a more digestible summary.
In this sense, the volume’s greatest weakness, its bulkiness – at least in terms of its stated mission of being an accessible guide for policymakers – is also its greatest strength: in one place, you can find the arguments, the core foundational information, and much of the science and knowledge that supports the feasibility of such a complex transition, across all of the sectors that are most relevant to a carbon-free and environmentally sustainable economy.
For that reason alone, Transitioning to a Prosperous, Resilient and Carbon-Free Economy: A Guide for Decision-Makers is a valuable contribution to the growing literature on transition, an idea whose time has not only come but which is absolutely critical to whether human life will continue to be possible on planet Earth.