Future of Fossil Fuel in the Contemporary Globe

 Fossils Fuels have historically been a fundamental driver of global development, enabling the Industrial Revolution and powering modern economies due to their high energy density and established infrastructure. However, the soul of the modern industrial society has been in the immense pressure due to the transition to the clean energy as well as the geopolitical factors. Though coal, oil, and natural gas still underpin much of today’s energy system, their long-term role is being reshaped by climate concerns, technological change, economics, and geopolitics.

The article therefore emphasizes on the discussion on the future of fossil fuels in the following dimensions:

a. Continued consumption with arising challenges

As per the reports from the International Energy Agency, fossil fuel is the source for the four-fifth of the world energy sector but the recent trends of the consumption shows that it has been in the declining pattern in the developed economies while the share of it in the developing countries as well as the least developed countries in the Asia and Africa has been in increasing trend.

 

b. Global concern on Climate Change

The strongest force shaping the fossil fuels is the raising concern on climate change. The awareness upliftment in the people regarding the climate change and fossil fuel as the main contributor to it has release the immense pressure to minimize the use of the fossil fuel. Many global campaigns are being conducted to create pressure on the policy makers to amend the policy regarding the consumption of fossil fuels being it the major cause for the global warming due to the GHGs release on its combustion.

 

c. International Frameworks

Various international frameworks guide the control over the consumption of the fossil fuel in order to mitigate the effect of climate change. The following international frameworks are found instrumental

·        United Nations Environment Program (UNEP) founded in 1972 with 193 members emphasize on the environmental government, ecosystem management and categorized the harmful substances

·        United Nations Framework Convention on Climate Change (UNFCC), 1992 is the foundation treaty regarding the climate change which was established to stabilize GHGs concentration. It made the distinction between the Annex I & Annex II countries and introduced the concept of “Common but Differentiated Responsibilities”

·        Kyoto Protocol, 1997 was the first legally binding international agreement which set the emission target for developed countries with 2 commitment period i.e 2008-2012 & 2012-2020. It covered 7 GHGs and introduced various Market Mechanisms.

·         Paris Agreement, 2015 with 196 signatories aimed to limit the global warming to well below 2⁰C with the effort to restrict the increase to 1.5⁰C above pre-industrial levels. It introduced nationally determined contributions and emphasized financial support from developed countries.

·        Intergovernmental Panel on Climate Change, IPCC assesses the scientific research on the climate change.

 

d. Shift from the Fossil Fuels to Renewable Energy

The shift marks one of the most important one driven by technological innovations, environmental conservation and resource limits. The use of traditional energy in coal, crude oil and natural gas which are the major source of greenhouse gases, contributor to the air pollution and have limited availability in the earth are shifted to the renewable energy such as solar, geothermal, biomass, wind, hydropower as they are sustainable over long term and have zero or low greenhouse emission.

Despite the advantage of the renewable energy over the fossil fuel, the increasing cost of innovation for the renewable energy extraction as well as the existing infrastructure and the supply chain of the renewable energy has been challenge for the replacement.

 

e. Economics of Energy

The economics of the energy sector i.e between the fossil fuels and the renewable energy can be presented as the fossil fuel being economical in the initial stage as the fossil fuel has long built existing structure while the renewable sources of the energy needed high upfront capital costs for the established of its infrastructure like turbine, solar panel. But the long-term analysis shows that the operating cost for the continuity of the fossil fuel has comparatively high cost than the renewable energy.

The increasing production of the infrastructure in the sector of renewable energy resulting in the decreasing average cost will help in the economies of scale of the renewable sources.  

 

f. Technological Innovation

Technological innovation in the sector of renewable energy is promoted by the governments around the globe by the means of the policy reformation and various incentives for the innovation. This boost has provided the development leading to the decreasing cost as well as high energy efficiency.

The development of advance battery technology, smart grids as well as the use of AI, data analytics, IOT in the renewable energy sector has resulted in the optimization of the renewable energy as well as provided the base for its scalability.

 

g. Geopolitics and Concern over Energy Security

The sources of fossil fuels are concentrated in the limited part around the globe creating their hegemony in the sector. The supply and distribution of the fossil fuels are seen heavily relied on the political conflicts often creating supply shocks.

For instance, the Russia-Ukraine War initiated in the 2022 has brought energy crisis in the Europe as the European countries have high reliance on the natural gas imported from Russia which shares up to the 50% of the total usage.

Thus, the consequences of high volatility of the fossil fuel due to the global events can be neutralized if it can be replaced by the renewable energy as it provides greater price stability due to the availability of the sources locally and can be instrumental for long-term economic planning.

 

Nepal in Statistics and the Future

According to the “The Energy Synopsis Report, 2024” published by Water and Energy Secretariat, Government of Nepal, Fuelwood is the primary energy source with its consumption share of 60.4% of the total. Petroleum fuel holds the second source of energy with its consumption share 14.3%. Thereafter, Coal holds the share of 9.3%, Electricity at 4.2%, LPG at 3.5%, Agriculture residue at 3.0%, Animal waste 2.9% and renewable sources at 2.3%.

The report highlights the usage of traditional energy sources in wood, agricultural residue and animal waste as the major source of energy having the share of 66.3%. Due to the state of industrial underdevelopment in Nepal, fossil fuel have comparatively lower share of 14.3% but the consumption of it is challenged due to the transition from fossil fuel to renewable energy.

Moreover, Government of Nepal has also adopted the policy of motivating the usage of renewable sources of energy over the fossil fuels. The government has provided various kinds of concessions in the budget like significant custom duty reduce on the import of the electric vehicles leading to the shift of diesel-petrol engine vehicles to electric vehicles as the operating cost is lower in EVs. It has also taken the motive of increasing the household electricity consumption by the conducting campaigns such as "Quit LPG Connect Electricity" campaign and "Smoke-free Kitchen Campaign" which aim to provide subsidies and distribute electric stoves, sometimes on a grant basis at the local level.

The completion of various hydropower project such as Upper Tamakoshi Hydropower Project, 456 MW has increased the Nepal’s hydroelectricity capacity. Nepal's installed electricity capacity has reached 3,878 megawatts (MW) in its national grid (Source SASEC) with its multiple crucial projects nearing completion Also, the ongoing construction of transmission line under the projects such as MCC has established the base for the independence in energy sector in coming future providing immense boost to reduce its dependence on the import of fossil fuel.