SPHERE 1: THE REGIONAL PERSPECTIVE
Energy alignment and the regulation of change
The Siemens Infrastructure Transition Monitor tracks infrastructure transition goals in the areas of buildings, mobility, energy, and certain industries. You can use it to explore the progress and priorities of regions, cities, and industries, as reported by 1,400 senior executives involved in designing, owning, or operating infrastructure assets.
Here, we look at how regions can speed up the infrastructure transition and why energy is so important.
Explore current progress and priorities across 11 regional infrastructure transition goals and 14 regions
Explore current progress and priorities across 11 regional infrastructure transition goals and 14 regions
Can we transition fast enough?
The infrastructure transition is accelerating despite the social, political, and economic challenges of recent years. And the pace of change is putting pressure on infrastructure systems worldwide.
But only about half of senior executives believe their country has a decarbonization strategy that’s either consistent or effective.
52% of senior executives believe their country has a consistent decarbonization strategy
47% of senior executive believe their country has an effective decarbonization strategy
Every major type of infrastructure will need to adjust to a low-carbon world, but energy infrastructure is the most important: it‘s estimated that three-quarters of global greenhouse gas emissions come from the production, use, and transportation of energy.
75% of total emissions comes from energy
75% of total emissions comes from energy
To decarbonize energy systems we have to redevelop the infrastructure that supports them. This is a multi-decade, $275 trillion shift requiring deep changes to electrical power generation, distribution, and consumption – as well as industrial processes, buildings, transport, and the governance, systems, and structures that keep the world functioning.
But most of the executives we surveyed say their country is neither mature nor advanced on the major energy goals of the infrastructure transition.
This needs to change. Everyone involved in energy will have to adapt to a new reality of long-term accelerated change – with all the associated disruption. The urgency of the infrastructure transition makes this unavoidable.
According to the IPCC, the scenarios that limit warming to under 1.5°C or 2°C require “rapid and deep and, in most cases, immediate greenhouse gas emissions reductions in all sectors this decade.”
Who’s responsible for the infrastructure transition?
We’re all responsible for the infrastructure transition, but some of us have more power to effect change than others.
For the senior executives we spoke to, regulatory authorities have the greatest responsibility for driving progress. But these institutions are in a tough position. Most of the time, governments set their agenda, but political change can suddenly rearrange priorities. At the same time, they know how important it is to give businesses enough stability and certainty to encourage investment.
How should responsibility be shared for driving progress in the infrastructure transition?
Certainty in the market is important. Investors and businesses need to know what the rules are and how they will change over time. For example, the net zero carbon building code sets new requirements for energy demand in new buildings. These requirements can be ratcheted up over time, which gives the market time to prepare. This provides certainty and predictability, which encourages investment and innovation.”
Cassie Sutherland
Managing Director, Climate Solutions and Networks, C40 Cities
Do citizens, businesses, and government agree about what to do?
We asked the senior executives in our survey whether citizens, businesses, and government agree about seven important aspects of the infrastructure transition. Their responses are not promising.
One reason for this lack of alignment is that these groups have different priorities
Citizens are often supportive of the infrastructure transition until it affects their immediate area. And they have other concerns that they see as more pressing, such as job losses and higher energy costs.
Businesses are often more interested in the long-term economic impacts of the infrastructure transition, such as the cost of new technologies and the need to adapt to a changing climate.
Governments are more likely to be thinking about the overall public good, such as making sure the population has access to clean, affordable energy and transportation.
Citizens are often supportive of the infrastructure transition until it affects their immediate area. And they have other concerns that they see as more pressing, such as job losses and higher energy costs.
Businesses are often more interested in the long-term economic impacts of the infrastructure transition, such as the cost of new technologies and the need to adapt to a changing climate.
Governments are more likely to be thinking about the overall public good, such as making sure the population has access to clean, affordable energy and transportation.
In many countries, the role of government in the infrastructure transition is open to debate. There are often conflicting views on energy and emissions policies, regulatory frameworks, and systems of incentives and penalties.
But some governments are making efforts to support the decarbonization of energy. Examples include Europe’s Green Deal, the USA’s Inflation Reduction Act, and China’s commitment to becoming carbon neutral by 2060. Ideally, these measures will encourage the kind of coordination the infrastructure transition needs.
