Political risks due to potential loss of public support over rising power tariffs are a major impediment to transitioning to cleaner electricity sources, ministers from New Zealand and Cambodia told an energy industry event on Monday.
“It’s incredibly important to take the public with you, given that end of the day, they have to believe that what you’re doing is enhancing their lives,” Shane Jones, Associate Minister for Energy, New Zealand, said at the Singapore International Energy Week conference.
Jones said New Zealand’s power tariffs are comparable to Singapore’s, ranking among the highest in the Asia-Pacific region.
“If the public feel that they can’t see the upside of the medium- to long-term climate-positive outcomes, and they’re suffering disproportionately on the journey, it leads to political mayhem,” Jones said.
Cambodia’s energy minister, Keo Rottanak, said the transition in Southeast Asia towards net zero would be costly and take a long time.
“If we don’t bring costs down, we may lose the public support, and therefore it will just make the whole thing go away,” he said.
At the same event, Amin Nasser, CEO of Saudi Aramco, the world’s largest oil-producing company, cited limitations of current transition plans.
“In a transition that requires staggering amounts of front-end capital investment, the cost of capital is more than twice as high in developing countries where the need is greater,” he said.
“Let us be clear: all sources of energy will be required for decades to come. Planners must also abandon the belief that a single plan can meet the needs of more than 200 countries,” he said.
The transition “would be expensive for everyone,” he said.
Nasser said existing plans have not even been able to reduce demand for carbon-intensive coal.
“Trying to force an unworkable, unaffordable transition plan on them will only threaten their economic progress and even social cohesion,” he said, referring to the global South.