Role of the World Economic Forum

The World Economic Forum is the International

Organization for Public-Private Cooperation.

Our mission is to improve the state of the world.

Our purpose is to bring together stakeholders

from all sectors of society to shape the future.

Governments, businesses or civil society alone

cannot sustainably address the economic,

technological, environmental and social

challenges of an increasingly complex,

interdependent and fast-transforming world.

Instead, they need to work together via a trusted

global platform for informed collaboration and

cooperation.

Over the past 50 years, the World Economic

Forum has earned the trust to build and curate

impartial and independent platforms.

Shaping the Future of Energy and Materials: Portfolio of initiatives

• COVID-19 Platform for

Energy and Materials

• Systems of Cyber

Resilience*

• Financial Resilience: ESG*

• Human Capital Resilience:

Future of Work*

Country Transition and

Benchmarking

Innovation and Clean

EnergySystemic Efficiency 53 4

Approach

Foster effective energy

transition by increasing

the speed of adoption

and scale of effective

policies and corporate

decisions as well as

collaboration across the

energy ecosystem.

Approach

Enable collaborative

action to accelerate

innovation and

deployment of clean

energy solutions and

strategic insights on new

innovations frontiers.

Approach

The optimization of energy to

create a zero-carbon future.

Bringing together

stakeholders on maximizing

effectiveness and

efficiencies at the

intersection of energy,

industry, buildings, and

transport.

Materials Value and

Productivity2

Approach

Catalyze collective action to

increase the net social,

economic and environmental

value delivered by materials

through the creation of an

enabling environment for

their responsible, innovative

and productive use across

their entire lifecycle.

• Global Energy Transition

Index

• Country energy dialogue

series

• Thought leadership

• Mission Innovation

• New Carbon Economy*

• Alliance for Clean Air

• Clean Hydrogen

• Framework paper

• Policy and Ideas*

• Dialogue*

• Energy Technologies 2030

• Mining & Metals Blockchain*

• Collaborative Innovation for

Low-Carbon-Emitting

Technologies*

• Aluminium for Climate

initiative*

• Net-Zero Steel initiative*

Energy and Materials

Business Resilience1

Approach

Enable a rapid and

substantial sectoral response

to the COVID-19 virus and

increase structural resilience

of business, critical

infrastructure and systems.

Linked to our Platform

• Mission Possible Platform

• Global Battery Alliance

Climate change likely to have extreme impacts on the

world with interconnected and hard to predict effects

… requiring transformative action across different

sectors to limit the CO2 emissions

Bill

ions o

f Tonnes

of C

O2

-eq.)

Remaining

CO2 budget

for 2 degrees

Annual Emissions 2018: 38 GT

6

Source: IEA WEO 2018, various

France Suspends Fuel Tax Increase That

Spurred Violent Protests

December 4, 2018

Sharp Rise in Petrol Prices Sparks

Protests Across Iran

November 16, 2019

India Opposition Block Roads, Offices

Shut in Fuel Price Protests

September 10, 2018

Clashes Erupt in Ecuador Fuel Price

Protests

October 8, 2019

Haiti Suspends Fuel Price Hike After

Deadly Protests

July 8, 2018

Brazil Fuel Protests: Temer Cuts Diesel

Price in Bid to End Strike

May 28, 2018

Egypt Lowers Fuel Prices After Protests

October 4, 2019

Tunisia: Protests After Raising Fuel Prices

for Sixth Time

April 3, 2019

Violent Protests in Zimbabwe After Major

Hike in Petrol Prices

January 16, 2019

Planned Fuel Protests Could Disrupt SA’s

Election Next Week

April 30, 2019

Global Fossil Fuel Consumption Subsidies

Fossil fuel subsidies remain high, while affordability is an obstacle for reforms to

phase them out

Public backlash against fuel price rationalization and subsidy removal across countries

7

Carriers

Markets and

demand

sectors

“Physical”

Civil

society

Govern-

ment

“Social”

“Boundary

constraints”

Energy

sources

Industry

Economic Development and

Growth

Energy Access and

Security

Environmental

Sustainability

Narrative for Energy Transition

The objective of the

energy system is to

deliver across the three

corners of the energy

triangle, under

consideration of

country-specific

constraints

Energy system benchmarking at World Economic Forum

Launch of

Energy

Architecture

Performance

Index

Case studies

on challenges

for key

regions

Energy reforms

in major

energy

consuming

economies

Deep dive on

“Energy

Access and

Security”

Deep dive on

“Energy

Sector

Governance”

Revised

methodology

element,

launched

Energy

Transition Index

Regional

energy

transition

challenges

focus, coverage

on speed and

complexity

115 90% 93% 98%CountriesOf global

population

Of global

Total primary

energy supply

Of global

GDP (nominal)

2013 2014 2015 2016 2017 2018 2019

ENERGY ARCHITECTURE PERFORMANCE INDEX ENERGY TRANSITION INDEX (ETI)

Imperatives for

Energy

Transition post

COVID-19

20202012

ETI Framework (1/2) – System Performance

Economic development

and growth

Security

and access

Environmental

sustainability

Energy

triangle

ETI Framework (2/2) – Transition Readiness

Infrastructure and

innovative

business

environment

Enabling

dimensions

Institutions

and governance

Regulation

and political

commitment

Capital

and investment

Human capital

and consumer

participation

Energy system

structure

Enabling business

environment

• Manageable risk

• Increased transparency

• Ease of doing business

Regulatory framework• Regulatory stability and

commitment

• Policy and regulatory support

Innovation and

infrastructure

• Trade logistics

• Transportation infrastructure

• Innovative Business Environment

Human capital and

consumer

participation

• Skilled workforce

• Quality of education

Energy System

Structure

• Economic structure

• Path dependency from legacy

infrastructure

Capital and

investment

• Access to capital

• Investment in energy efficiency

• Investment in renewables

Key leversReadiness Dimension

74.2%

73.4%

72.4%

72.2%

72.2%

70.5%

69.9%

68.7%

68.0%

67.3%

Sweden

Switzerland

Finland

Denmark

Norway

Austria

United Kingdom

France

Netherlands

Iceland

79.3%

77.0%

70.7%

68.9%

81.1%

70.2%

71.9%

73.9%

68.4%

74.0%

69.1%

69.8%

74.1%

75.6%

63.3%

70.8%

67.9%

63.5%

67.6%

60.7%

0.8%

1.6%

2.9%1.7%

2.0%

2.0%3.3%

1.8%

ET

I 2

01

5 A

ve

rage

Sco

reC

ha

nge

fro

m 2

01

5 -

20

20

78 32 80 22

20 47

5086

7

8

48

28

7074

67

26

36 56

106

• Strong political commitment: Rapid evolution in policy landscape, gradual implementation of

carbon pricing mechanisms

• Better access to capital: Emergence of new asset classes and financial instruments,

mainstreaming of ESG metrics

• Improving energy intensity through automation, digitalization, and energy efficient alternatives

• Pursing breakthrough innovative solutions for large scale impact (as opposed to incremental

progress)

• Decouple economic growth from energy consumption through diversification to high value add

and economically complex sectors

• Broaden scope of net zero targets to include small and medium sized organizations, in hard to

abate sectors, with less end-consumer facing business models

• Mobilize public engagement through access to easily relatable information on carbon

footprints

Gap between scores of net energy importing and exporting countries is

widening

82% of the countries improving on the ETI targeted energy subsidies

reduction

Household electricity tariffs are significant share of household final

consumption expenditure, especially in developed countries

Natural gas emerging as a key fuel in energy transition, methane

emissions are an emerging concern

Need for energy access 2.0: access to diverse forms of energy, for

household, community, and industrial applications

0%

25%

50%

75%

100%

0%

25%

50%

75%

100%

0%

25%

50%

75%

100%

0%

25%

50%

75%

100%

SWE

CHE

FIN

DNK

NOR

AUT

GBR

FRA

NLD

ISL

IRL

URY

KOR

•

•

•

•

•

Syste

m P

erf

orm

ance (

%)

Transition Readiness (%)

Potential Challenges Leading Countries

Emerging Countries Leapfrog Countries

Economic

Growth

Affordability

Investments

Renewable

energy

Emissions

Consumer

Aptitude

OPPORTUNITIES CHALLENGES

Economic stimulus measures with green strings

attached

Loss of jobs from production cuts and industrial

slowdown

Energy prices are low due to demand erosion Governments are increasing fuel taxes to

finance fiscal stimulus

Public investment in infrastructure development

to accelerate recovery

Low risk appetite and higher cost of capital in

private investments

Supply chain issues to affect renewable energy

projects, delays in constructionShare of renewable energy in electricity mix is

at an all time high in multiple countries

Unprecedented decline in emissions, air quality

at all time high in many cities

Few countries are relaxing emission control and

energy intensity targets

Less use of public transportation and ride

sharing to minimize risk of infectionIncrease in remote work arrangements, decline

in air travel

Appendix

Measuring output oriented observational

data or best available proxy

Output variables

Sourced from renowned institutions

Reliability

Maintain same data partners on regular

basis, for annual updates

Reusability

Adequate global and temporal coverage

Completeness

Represents best available measures,

given constraints

Quality

ETIscore

System Performance score

50%

Transition Readiness score

50%

Economic Development &

Growth

Environmental Sustainability

Security & AccessCapital &

investment

Regulation & Political

Commitment

Energy System Structure

Institutions & Governance

Infrastructure & Innovative Business

EnvironmentHuman Capital

Ind

ustry co

mp

etitiveness

Fossil fu

el sub

sidies

Affo

rdab

ility

Co

st of extern

alities

GD

P co

ntrib

utio

n

Air p

ollu

tion

Energy in

tensity

Carb

on

inten

sity

Carb

on

emissio

ns p

er capita

Energy access

Qu

ality of su

pp

ly

Secu

rity of su

pp

ly

Acce

ss to cap

ital

Recen

t investm

ent in

to EE

Re

cen

t inve

stmen

t into

RES

Ab

ility to in

vest

Co

mm

itmen

t to in

tl. agree

men

ts

Stable p

olicy

Re

gulatio

n to

sup

po

rt EE, RES,

Acce

ss

Transp

arency &

po

litical stab

ility

Ru

le of Law

Stable fin

ances

Trade lo

gistics

Transp

ortatio

n in

frastructu

re

Availab

ility of tech

no

logy*

Inn

ovative b

usin

ess en

viron

men

t

Job

s in ren

ewab

le energy

sector

Qu

ality of ed

ucatio

n

Energy d

eman

d gro

wth

Electricity energy m

ix

Fossil fu

el dep

end

ency

33% 33% 33% 17% 17% 17% 17% 17% 17%

20%

20%

20%

20%

20%

25%

25%

25%

25%

33%

33%

33%

25%

25%

25%

25%

33%

33%

33%

33%

33%

33%

33%

33% 0

33%

50

%

50

%

33

%

33

%

33%