The double crisis´s effects on the global energy transition: is the North-South divide deepening?

The world has embarked on an energy transition to “carbon neutrality” in the context of the Paris Agreement, which aims to contain global warming to 1.5C - maximum 2C. This transition is already delivering numerous benefits but is also creating new inequalities, notably between countries in the Global North and China (usually leaders of the energy transition) and countries in the Global South (usually laggards). In the North, the energy transition is framed as a sine qua non-condition to reach the goals of the Paris Agreement but also as a source of new technological and economic opportunities. In contrast, many countries in the Global South - with some exceptions - have continued developing the fossil fuel-based economy and have had trouble developing new low-carbon technologies. Renewable-energy technologies, however, have become cost-competitive in most countries and have started a wide diffusion also in the South before the pandemic struck. Since 2020, the world has been confronted with a “double crisis” - the Covid-19 pandemic first and the energy crisis related to the war in Ukraine later. Scarce but increasing evidence suggests that past economic and energy crises have impacted the global energy system and carbon dioxide emissions, but also that such impact may substantially differ across countries. In this paper, we ask how the double crisis influences the global energy transition to carbon neutrality, particularly to which extent the effects differ between the Global North and the Global South. In a panel of 30 major economies, we investigate three types of effects: 1) Decoupling between GDP growth and CO2 emissions, including decoupling indexes and decoupling states. These indicators account for the direct -short-term- disruptive effects of the crises (2020-2022) compared with the pre-crisis trend (2017-2019). 2) Policy responses to the crises. Here we focus on three policy measures which may substantially impact the energy transition: (i) green recovery packages, (ii) carbon pricing systems (enacting, dismantling, and price adjustments), (iii) changes in key regulation affecting the energy system (ex. Coal phase-out mandates). 3) Investment dynamics. Here we assess the trend changes before and during the crises in investments in fossil fuels and low- and zero-carbon technologies -renewables, energy storage, electrified vehicles and heating, hydrogen, and nuclear power. Finally, we test statistically to which extent the changes in the variables above may be explained by differences in GDP per capita and the severity of the crisis in each country (loss of GDP growth compared to previous trends). We expect that the double crisis has had substantially different effects on the Global North and the Global South regarding investment dynamics and policy responses. Decoupling between GHG emissions and GDP intensifies in developed countries (confirming trends during previous economic crises). Simultaneously, investment in zero-carbon energy accelerates in developed countries - boosted by green recovery packages - while it stagnates or decreases in middle and low-income countries. A deeper North-South divide due to the double crisis may create new challenges for the global transition to carbon neutrality and the development of middle and less advanced economies.