23.11.2021, 10:11 13

Energy Crisis And Global Climate Change

Especially with the pandemic process partially taken under control, this year, the growth process in the world economy and the significant increase in energy demand, and the lack of supply led to increases in energy prices, which is expressed as a crisis.
Closing 2020 at €16.72, the European natural gas price went up to over €160, 8 times more than the price at the end of 2020. Natural gas prices also triggered coal prices. Coal price for November 2021 delivery reached its highest level at $275. Along with coal, natural gas prices brought oil prices above $80.
This time, we are facing not only the oil crisis but also the natural gas and electricity crisis... Winter is approaching. Europe's natural gas stocks are insufficient, the contracts are very short-termed. On the other hand, gas imported from Russia is also limited. This means that there are problems in the security of supply. That is why prices go sky-high.

Insufficient natural gas supply also triggered the electricity problem. On top of it, the drought has already significantly reduced electricity production. Uranium prices are at a premium of around 50 percent, taking into account that nuclear power plants would be focused on in terms of energy due to the shortage of natural gas and the lack of electricity.

IN CASE WE FACE HARSH WINTER CONDITIONS, IT WILL INCREASE EVEN MORE AND THE CRISIS WILL DEEPEN

The main reason for increases in price is the higher energy needs of the economies, insufficient supply, and lack of sufficient stocks. Therefore, the world is in the middle of an energy crisis. We are experiencing a wide energy crisis that starts with natural gas and includes coal, oil, and electricity. The energy bill of economies has increased. In case we face harsh winter conditions, it will increase even more and the crisis will deepen.
Evaluating the crisis, OPEC Secretary-General Muhammed Sanusi Barkindo said, "The crises we are witnessing in the energy markets around the world, especially in the natural gas and electricity generation sectors, is a wake-up call. While the volatility and disconnection are caused by the supply and demand factors in the global LNG (liquefied natural gas) market and the European natural gas market, limited pipeline flows, and low gas stocks, chain effects are widely felt. For the oil market, the gas market crunch could further increase demand for substitute fuels, including petroleum products, for heating and power generation, in case the winter passes colder than usual, creating further spillover effects."

ENERGY IS THE BIGGEST SOURCE OF GLOBAL CLIMATE CHANGE AMONG ALL SECTORS

In addition, energy is the biggest source of global climate change among all sectors. About 80 percent of global warming is caused by energy. Therefore, we must reduce emissions from energy to avoid a bad climate situation.

In particular, we need to rapidly reduce energy types such as carbon-based oil, coal, and natural gas, and replace them with renewable energy types such as wind, hydroelectricity, solar energy, and nuclear energy.

Large investment expenditures are required for the world's transition into a green economy and renewable energy. In this context, one of the main topics of the climate change conference held in Glasgow, Scotland will be the establishment of a proposed $100 billion fund for energy investments.

IT SHOULD BE ADDRESSED IN THE CONTEXT OF UN SUSTAINABLE DEVELOPMENT GOALS.

It is crucial that the fight against both climate change and energy shortages is addressed in the context of sustainable development and the UN Sustainable Development Goals. What we are witnessing today consists of frustrations and disagreements about energy affordability, energy security, and the need to reduce emissions.
In the upcoming period, we have to take and implement the necessary and compulsory decisions in line with the UN Climate Change Initiative so that we can achieve clean and renewable energy and put a stop to climate change.

The 197 countries that will participate in the conference should both create safe and balanced energy sources that do not produce emissions, and put a stop to global warming. It is very difficult to achieve this goal until 2040, which is foreseen at this stage, but even approaching the goal will be a success for the future of the world.

Our country will certainly be adversely affected by the increases in price. However, we should commend efforts to increase renewable energy production. It was right that our country also signed the Paris Agreement and that the agreement was approved by our Parliament.

Osman Akyüz
Secretary General of Participation Banks Association of Turkey (TKBB)

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