First, let’s go back nearly 30 years to 1997 and the Kyoto Protocol that was signed at COP2 in December of that year – the point at which the need for global action on climate change was widely recognised. We knew back then the problem we faced with climate change. Unfortunately, as we have witnessed since, that did not result in the pace of action required.

Now let’s imagine Planet Earth in 1997 as a single country, without borders, with one set of global regulations, and rather than competing for resources and energy, we were able to optimise for the greater good of all. You’ll need to bear with me on this!

Let’s call it United Nation. For argument’s sake, let’s assume it’s a liberal democracy, with free market competition but a clear role for the government in regulation, fiscal planning and long-term infrastructure planning. Perhaps taking the best of the US, Europe and China in today’s world?

So, what might be different?
First, we would almost certainly have long set a global carbon price. Having recognised the risk of climate change to the whole planet, it’s not a stretch to believe that the government and the global population would have accepted this as a sensible course of action – particularly with the ability to apply it on a globally level playing field.

From this we would now have had nearly three decades of capital allocation based upon the externality of carbon (and other forms of pollution). This would have accelerated initial investments in renewables (depending, of course, on how subsidies were implemented).

Equally, or perhaps more importantly, it would have created a much stronger merit order for fossil fuels, particularly where substitution of one for another was relatively straightforward; that is, switching from coal to gas generation of electricity. With coal emitting around twice as much CO₂ as gas, the right carbon price could dramatically have increased the pace of the phase-out of coal, creating much stronger demand for gas.

It’s questionable whether expensive and high-carbon production forms of oil and gas, such as oil sands, deepwater and arguably shale would have been developed. And without an OPEC controlling price, even more oil production would be coming from the Middle East and a lot less from higher-cost regions such as the US, Canada and Venezuela.

With security-of-supply concerns only set by geography and weather, we also would not have done some of the crazy things we have done. For example, burning oil to desalinate water to grow crops in the Middle East, or growing crops in the US to combust as transport fuels. In United Nation we would optimise production and consumption of all commodities on a techno-economic basis.

Second, it’s often said the cheapest, most accessible and lowest carbon form of energy is the energy we don’t use. To this end, through a combination of global regulation and the impact of carbon pricing, United Nation would have focused far, far more on driving energy efficiency – in homes, in industry and in transport. Knowing what we know now, we would have built every new home in northern climes to passive home standards and, regardless of the pace of electric vehicles (EVs) – which I’ll save for another day – higher efficiency standards on internal combustion engine (ICE) vehicles would have long been implemented globally.

Let’s imagine Planet Earth in 1997 as a single country, without borders, with one set of global regulations, and rather than competing for resources and energy, we were able to optimise for the greater good of all.

Third, we would deploy renewables where they made most sense. Sorry Scotland and Norway, but until Africa had had its fair share of solar, we probably wouldn’t have gone further north than France with photovoltaics (PV). But Scotland, and the rest of the UK, would likely have much more onshore and offshore wind.

We would likely have a connected global grid, with long-distance HVDC cables to not only take power from renewable-resource rich locations to demand centres, but also to load-shift with time. Rather than curtailing Scottish wind at midnight, we would send it to New York for the evening peak. And storage technologies would have scaled more quickly. Digital technology would play a far greater role in optimising this system, through necessity but also through global standardised regulation and market signals. Regional pricing of energy would be set by marginal production cost + transportation (plus carbon) rather than different and arbitrary price mechanisms.

Fourth, we would have approached large-scale and complex energy projects on a global scale. Nuclear would have been deployed on a fleet scale globally, optimising standardised design and regulation. If we combined the scale of US and French deployment in the 1980s–1990s, with China’s today, it’s reasonable to believe global deployment of nuclear could have been two or three times larger and much cheaper on a unit basis.

Technologies such as green hydrogen, carbon capture, use and storage (CCUS), and fusion energy might have been a decade or more further advanced, rather than at the very nascent stage they are today. Whilst competition can drive innovation, there is perhaps a stronger case that combining United Nation’s R&D capabilities would have accelerated rather than hindered these technologies.

Finally, what’s left are questions around where we’d be on decarbonising hard-to-abate sectors such as shipping and aviation. A carbon price would have tempered demand and prioritised more low-carbon investment. Would we have a global fleet of electric, sustainable aviation fuel (SAF) or hydrogen planes by now? Probably not, but we’d almost certainly be further down that path. We might have also decided that the hardest areas should be deprioritised to focus on the lowest hanging fruit. With aviation at just 2% of global emissions, someone might have argued we should try to tackle the easier 98% first, although I appreciate that is a controversial view.

None of this is intended to be exact prediction; it’s impossible to prove the counter-factual. But it does give some clues on what might have happened.

Next week, in the final part of this series, I’ll turn away from my very hypothetical and optimistic view of life in one United Nation and set out what lessons we might draw for the real world.

• Part 1: ‘Lessons from previous energy transitions’. In the first of the three-part series exploring the implications of the recently published Energy Institute Statistical Review of World Energy on the pace of the energy transition, Energy Institute Chief Executive Nick Wayth discusses how energy transitions have occurred historically; what might be the same this time and what might be different. 
• Part 3: ‘Getting real about the energy transition’. Nick Wayth concludes his three-part series on the global energy transition by making some suggestions for improvement.