Davos 2023: WEF says energy crisis driving inflation, slowing GDP, but it's an opportunity for future

Global energy crisis: The World Economic Forum (WEF) has said that the current energy crisis across different countries is driving inflation, slowing economic growth and creating social turmoil. In its new report, the Geneva-based intergovernmental body said that the countries should look for new solutions that advance a sustainable and inclusive energy transition. 

The report, which was released ahead of the Davos annual meeting starting next week, highlighted that the world is in the grip of an unprecedented global energy crisis but short-term fixes, including the increased consumption of coal and the expansion of energy subsidies, may lead to a bleak future. 

“The energy crisis has brought energy security to the forefront of political and corporate agendas and prompted the need to develop responses that are adapted to how the energy system has evolved and to where it needs to transition,” said Roberto Bocca, Head of Shaping the Future of Energy, Materials and Infrastructure, World Economic Forum.
“The energy crisis impacts us all and the world cannot afford short-term fixes to the energy crisis which could increase future risks to both the climate and energy equity. The good news is that the crisis offers an opportunity for interventions that balance energy security with an effective low-carbon transition,” said Espen Mehlum, Head of Energy, Material and Infrastructure Program, World Economic Forum.  

The reports noted solutions including prioritising renewable energy investments, plugging methane leaks, maximising electrification, driving consumption efficiencies, and leveraging the excess profits made by energy companies in 2022.

The new report has proposed a comprehensive framework that provides a strategic blueprint to make security and resilience the backbone of a transition in the energy system, and 10 actions to align current interventions to address the energy crisis with long-term energy transition goals. 

“What is now a global crisis is a genuine opportunity to chart a more direct path to a secure, sustainable, and affordable energy future for all. To confront the complexities of the energy transition with immediate actions, radical collaboration and a pragmatic approach are required,” Bocca added. 

To achieve energy security and sustainability, the only solution is to accelerate the low-carbon transition and a comprehensive re-appraisal of energy systems is needed, the report has noted.